POTSDAM The village is looking to cut a deal with the Adirondack Economic Development Corp. as part of its ongoing effort to shut down its own Community Development Corp.
The Potsdam Community Development Corp. provided a way for the village to issue loans to local businesses in an effort to spur economic development. It became difficult to maintain with the passing of 2005s Public Authority Accountability Act, a state law requiring expensive audits for all publicly run corporations, regardless of size. The $2,500 annual audit proved difficult for Potsdams small development corporation, and last year the village board began discussing how to shut down the corporation while still providing loans to businesses.
The Adirondack Economic Development Corp. may provide the answer. The not-for-profit offers loans and training to small businesses across the north country.
The village board will vote Monday on whether to lend the corporation $150,000, which in turn will be lent to Potsdam small businesses.
They have a very active lending program, said Frederick J. Hanss, Potsdam planning and development director. They have the skill and ability to be able to provide the service to the village.
The much larger corporation is also better suited to handle the states reporting requirements.
If the Adirondack Economic Development Corp. begins working with Potsdam, it will provide small business development training in addition to loans. Some of these training programs will be targeted directly at prospective women and minority business owners, a rarity in Potsdam.
Having more women- and minority-owned businesses in the village could make Potsdam more eligible for diversity-minded state grants, according to Mr. Hanss.
Before the recession, the Potsdam Community Development Corp. would typically issue six to eight loans annually. The average loan is $25,000, although this can vary widely depending on need.
Negotiations with the Adirondack Economic Development Corp. have been underway for months, but pending a successful vote Monday, a deal is very close. If it happens, the Potsdam Community Development Corp. will be shuttered for good.
This is one step closer to being able to wind up its business affairs, Mr. Hanss said.