Additional Fund Details on Sheridan Loan

The recent loan agreement for the removal of 995 Sheridan Blvd sparked questions about the finances and handling of the loan.

Further reading into L.M.C. 3.26.030, shows another provision which states: “…the city shall never be a joint venture in any private entity or activity which participates in the economic development fund”

The traditional interpretation of this clause is that the city shall not receive profits from a joint venture, but a loan agreement is a new construct for the city. This agreement is instigated for city purposes, more than the business.

One Council Member raised concerns that Lakewood was not set up with loan officers and other traditional bank operations which made for safe financial practices. That concern was dismissed with the explanation that the city was not making loans to people but making an investment in the land, which is guaranteed. The loan will be made to Ten Sheridan, LLC, enforced by a lien on the property.

Council Members asked how much money was available in the fund but no clear answer was possible because the 2022 financial report is not yet available. The current estimate is the fund holds over $9 million but that is not the full answer. Lakewood counts about $5.5 million in investments as of the 2021 financial report. There was about $3.8 million in cash. So the current loan represents one-quarter of the remaining cash available unless significant changes have occurred in 2022.