To the Editor:
I am writing today in relation to a concerning and developing trend within the City of Alameda.
It appears that the City of Alameda is involved in giving loans to private businesses. I am aware of two significant money loans given within the last year. Prior to that, I was not aware of this practice taking place in Alameda. It is clear that cities, in general, are involved with nonprofits, but we are talking about private businesses and very lucrative loans.
The first loan was given to Firebrand Bakery for $300,000 at 2% interest. This is at a time when small businesses would be paying 7% to 10% or more, if they could even get a loan. An additional concern with this loan is that the owner was not required to give a personal guarantee and was allowed to consider used kitchen equipment as collateral. Some equipment was “new” at the time of loan, but is “used“ by now. What is used kitchen equipment worth at a time when so many restaurants are failing?
The second loan was just approved at last Tuesday’s Council meeting. This loan was for Alameda Point developers and was at prime plus a nominal percentage. Again, very lucrative. The most egregious part is this money is being loaned from the Fund 290 Alameda Point money. This is high-risk behavior that potentially jeopardizes base re-development.
There is easy access to all of the data and facts as this is public information and was done through Council action at Council meetings. The lucrative nature of these loans was buried in the agenda attachments and only came to light through diligent individuals asking specifically for this data.
So when did the City of Alameda get into loaning money to private business? What are the criteria and application requirements? What are the policy and associated rules? Is this legal? Is it ethical? How do all of the small businesses that are hurting get one of these lucrative loans?
This situation stirs so many emotions when other businesses become aware of this—a sense of unfairness, lack of trust, loss of credibility towards the City, and apparent recklessness on the City’s part.
Everyone wants to know: Where is my lucrative low-interest loan? They particularly like the part about no personal guarantee and used equipment as collateral.
I trust the Post as an investigative entity for the public good and have faith that this situation will be thoroughly vetted. Thank you for your commitment to the public and doing your part in the protection of our public assets.
Tod Hickman
Alameda
Editorials and Letters to the Editor
All opinions expressed on this page are the author's alone and do not reflect those of the Alameda Post, nor does our organization endorse any views the author may present. Our objective as an independent news source is to fully reflect our community's varied opinions without giving preference to a particular viewpoint.
If you disagree with an opinion that we have published, please submit a rebuttal or differing opinion in a letter to the Editor for publication. Review our policies page for more information.
