Brunswick Development Corp. changes focus, rules for lending
BRUNSWICK — When the Brunswick Development Corp. received four funding proposals last month that exceeded the amount of cash it has in the bank, its directors had to take a step back to think about the bigger picture.
After holding a strategic planning session on Monday, BDC's board decided to change how it lends and grants money to nonprofit organizations and businesses, Linda Smith, the town's business development manager said.
From now on, BDC will focus its efforts in two ways: by offering grants to nonprofits for projects that have a community benefit, and by offering small loans to for-profit businesses, but only in tandem with other lending institutions.
BDC's board also unanimously voted to no longer provide grants or loans that could turn into grants to businesses, after a motion was made by Vincent DiCara, a new citizen board member who had offered the BDC advice last year after it lent an unprecedented and controversial loan to a business.
DiCara isn't the only new face at the BDC. Daniel Harris was also appointed to the board as a citizen member.
In addition, the board has two new town councilors: Sarah Brayman, who is vice chairwoman of the council, and Steve Walker, who was elected last year. They replace Councilors John Richardson and Suzan Wilson.
And since former Town Manager Gary Brown was dismissed by the council in February, interim Town Manager John Eldridge, also the town's finance director, has returned to an ex-officio position. Having previously been the longest-serving member of the BDC, Eldridge was removed last December when the board amended its bylaws to remove the finance director position.
BDC's change in direction contrasts with most of BDC's lending activity last year, which caught the public's attention after two town councilors – one of whom is now the council chairman – criticized BDC for the unprecedented $250,000, forgivable loan to Brunswick Taxi.
Walker said the thinking behind the decision to no longer give grants to businesses is "we have a responsibility for the public money and responsibility to the public to make sure the benefit from BDC is sustainable over time."
"So with doing loans," he added, "we can at least ensure money is coming back to the BDC over time."
BDC was incorporated as a nonprofit development corporation by the town in 1995, with a mission of supporting economic development. The nonprofit's assets originated with a loan from the town to develop an industrial park. BDC then paid back the town's loan in full.
When the loan to Brunswick Taxi was granted, Councilors Benet Pols, who is now chairman, and John Perreault said there was too much potential for a conflict of interest because of close ties between BDC's board and the business. The board included two councilors, the town manager and town finance director; Brunswick Taxi is owned by a current Planning Board member who is the husband of Joanne King, a former councilor and BDC board member.
After months of discussion, BDC's board approved new bylaws last December that included new ethics and conflict-of-interest policies, two of which would have prevented the Brunswick Taxi loan if they had been in place earlier.
The new conflict of interest policy prohibits former board members, elected officials or their spouses from applying for financial assistance from BDC for a period of one year after leaving office.
BDC's board is expected to discuss the possibility of working with Wiscasset-based Coastal Enterprises and the Midcoast Council of Governments for business lending on March 12 at 2:30 p.m. in Curtis Memorial Library's Morrell Meeting Room.
The board is also expected to consider the four funding proposals from last month, which amount to more than $700,000. They come from Rollease, a window covering manufacturer that recently opened at Brunswick Landing; Wild Oats, a bakery and cafe at the Tontine Mall; CAMM Inc., an audio speaker manufacturer, and a nonprofit group seeking to relocate the Farmer's Market.
The total in funding requests greatly exceeds the nearly $380,000 the BDC currently has in cash.