POTSDAM The village has finalized its decision to shut down the Potsdam Community Development Corp., citing strict state regulations that make it impossible for the organization to continue.
The corporation, which lends village money to businesses to spur economic development, will remain intact only until a replacement is found.
The nonprofit corporation was founded in 2006. It also applies for grant funds used to repair dilapidated buildings.
In 2005, the state passed the Public Authority Accountability Act, a law created to battle corruption at large public entities such as the state Canal Corp. and the Thruway Authority. The laws strict auditing requirements also apply to small public corporations, which has drastically raised Potsdams costs.
They cast a very wide net, and ended up catching a lot of small communities, Potsdam Planning and Development Director Frederick J. Hanss said.
The annual audit costs Potsdam $2,500.
The corporation used to issue three to eight loans annually, at an average of about $25,000. Jernabi Coffee, Potsdam Specialty Paper and Village Wines & Liquors are recent recipients. Almost all of the corporations loans are paid back in full, Mr. Hanss said.
The village is looking for a private nonprofit organization to take over the duties of the development corporation. The North Country Housing Council, a nonprofit group that already uses public and private funds for homeowner assistance and community development, was one of the first groups the village approached. Others have since joined in the discussion, and the village has yet to make a decision.
We have had some conversations with groups that have the ability and the capacity to do a loan program, Mr. Hanss said. We hope that they get wrapped up relatively early.
The Community Development Corp. will remain in place until a replacement is found, but this will not be long, according to Mr. Hanss.
I imagine that will probably be a matter of weeks, not years, he said.