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.
The group running Durham’s $2 million COVID-19 small business relief program was obligated to tell the city which businesses got the cash. But the city has yet to find out.
In July, Durham officials boasted in a press release about giving out hundreds of thousands of dollars in loans. Yet over a month later, they admit they still don’t know where the money went.
The city is supposed to get a monthly report. The Carolina Small Business Development Fund (CSBDF), a Raleigh-based small business lending nonprofit, committed to disclosing which businesses got money from a fund of $2 million in publicly-funded loans and $1 million Duke-backed grants, according to a copy of the contract between the city, Duke University and the group obtained by the 9th Street Journal.
The contract said the group “shall provide monthly reports” to Durham and Duke that included the amount of money paid to individual businesses and the business’s names, along with aggregate data about the owner’s gender, race and ethnicity.
Durham has gotten aggregate data, but not the business names and the amount they received, according to Deputy City Manager Keith Chadwell. Both Durham and the group were aware of the requirement, according to Chadwell, but haven’t exactly been in a rush to comply.
The information will be available to the public “within the next two weeks,” Chadwell said in an email to the 9th Street Journal. But his promise is would have the information being public more than six weeks after Durham’s self-congratulatory press-release, and well past the requirement in the contract.
“Generally, if a valid contract requires a party to do something and that party fails to do that thing in the set timeframe, they have violated the contract,” Charlotte-based First Amendment attorney Beth Soja said.
There’s no apparent reason for the delay, Soja said. There weren’t any exemptions in the contract that would preclude the group from handing over the information to Durham.
There also doesn’t appear to be anything in the contract that specifies what would happen in the event of the contract being violated.
Carolina Small Business Development Fund President and CEO Kevin Dick declined to comment for this story, saying Durham would respond “in order to represent the entire effort.”
The group was slated to give out cash over multiple months, with a first wave of loans and grants announced July 21 and a second round to follow.
So far, the group has approved eight businesses for Durham-backed loans for a total of $259,000, with $1.6 million in loans remaining, according to Brian Smith, the city’s senior economic development coordinator. That’s more than $32,000 per loan.
Little is known about those businesses, except that they range from sectors like the “personal care services” industry to beverage manufacturing to an alcoholic “drinking place.” The group has also given out about $849,000 in Duke-backed grants to 115 Durham businesses, or an average of about $7,400. Most of those businesses are retail, accommodation and food services, arts/entertainment/recreation, professional services and “other services.”