Editor’s note: This story was produced through a partnership between the INDY and The 9th Street Journal, which is published by journalism students at Duke University’s DeWitt Wallace Center for Media & Democracy.
Three weeks ago, city and county officials boasted in a press release that they doled out hundreds of thousands of dollars in loans and grants to dozens of small businesses.
But which ones actually got the cash? Twenty-plus days later, not even Mayor Steve Schewel seems to know. Schewel and other city officials claim they don’t know the recipients because the selection was done by a private group.
This much is known: 115 businesses have been approved for a combined $224,000 in Durham loans and about $800,000 in grants from Duke via the Durham Small Business Recovery Fund. The fund is made up of $1 million from Duke and about $2 million from Durham public funds.
But city officials admit they are in the dark about which businesses got the money. Raleigh-based small business lending nonprofit Carolina Small Business Development Fund (CSBDF), which administered the program, didn’t give Durham a list of businesses that got the cash, according to Andre Pettigrew, director of the city’s Office of Economic and Workforce Development.
Pettigrew said the program is now in the midst of another round of funding (with about $1.6 million in Durham loans and more than $200,000 in grants remaining) and the group isn’t planning on giving city and county officials a full list of businesses receiving the funds until this second and final round is complete. The only information city officials have received was aggregate demographic data of the business owners and the industries the recipients are in, Pettigrew said.
The 9th Street Journal filed a public records request for a list of the recipients, but the city referred it to the Small Business Development Fund and its president and CEO, Kevin Dick, who would not release the list. He said the group is consulting its attorneys about confidentiality issues for applicants that could arise from releasing business names because the group is a non-profit, not a government entity.
Without a copy of a contract between Durham and the group, it’s hard to know whether a non-profit is answerable to public records laws, Raleigh-based First Amendment attorney Amanda Martin told the 9th Street Journal. Pettigrew did not respond to a request for a contract in time for publication, nearly two weeks after first being asked. Government contracts are public record, according to the North Carolina General Statutes, Chapter 143 Article 3.
Schewel said that when he received the aggregated data on the grants and loans given out, he didn’t think it was crucial to know the names of the businesses at the time. He says he’s now looking forward to the list.
“This is public money and it should be public information,” Schewel said about the loans.
He later clarified by saying that while he didn’t believe the grants were actually public money, “it is a City Contract and should be public.”
Still, the group has been given sweeping powers to award the money. It green-lit eight of 29 applicants for Durham loans, for an average of about $28,000 per business. Among the approved businesses include two in the “personal care services” industry, one eatery, one beverage manufacturing company, one building equipment contractor, one alcoholic “drinking place,” a “jewelry/luggage/leather goods” store and an outpatient care center.
The program also approved 107 out of 196 grant applications for a total of about $800,000. Most of the grant applications accepted were in retail, accommodation and food services, arts/entertainment/recreation, professional services and “other services.”
Durham ultimately granted the group power to disperse the grants and loans because of a lack of bandwidth in the city government to do so and because of the group’s “expertise.”
“This is what they do, they make loans and administer programs like this for small businesses, and are especially focused on minority-owned businesses,” Schewel said. “They have the expertise and it’s not what the city does. So much of what we do in the city is contracting out to those with expertise.”
Schewel emphasized that neither he nor the rest of the City Council had seen a list of the individual loans. Schewel and the City Council had expected to get a list with the final report in “the next month or so.”
Support independent local journalism. Join the INDY Press Club to help us keep fearless watchdog reporting and essential arts and culture coverage viable in the Triangle.