A Salt Lake City loan to bail out public radio station KCPW has been thrown into question after attorneys found restrictions on using redevelopment funds to cover the station's operating expenses, according to city officials.
One potential option is to fund the $220,000 loan from the city's Business Revolving Loan Fund, said Economic Development Director Bob Farrington. But that would require that the City Council approve an exception to the fund's prohibition to lending to a nonprofit organization.
That's not unprecedented. Earlier this year, the council approved a "one-time" exception to the fund's no-nonprofits rule to lend $600,000 to The Leonardo museum after its opening was delayed months by construction problems.
"Our loan program is geared to business loans, so we would have to take a look at how [lending to a nonprofit] might fit that program intent," Farrington said. "The council did make a one-time exception for The Leonardo. If they wanted to do that, it's something they could consider."
Last week, the Salt Lake City Council, acting as the RDA Board, overruled its loan committee to unanimously approve a six-month loan. The money would have allowed the National Public Radio affiliate to pay off a loan due Oct. 31. Without the city loan, the station could default at the end of the month and possibly lose its license.
"It's disappointing. We thought we had gotten the approval," said KCPW president Ed Sweeney. He said the station has begun talking to city officials to get a replacement loan.
Salt Lake City Councilman Carlton Christensen acknowledged council members had received some criticism for loaning RDA money to KCPW. The council likely wouldn't have done it if KCPW weren't an important part of the Library Square development, he said. "If it weren't for that, I don't think we would still be looking at it."
Christensen said he would vote again to lend city money from another source to KCPW, but he isn't speaking for his colleagues. "I wouldn't be surprised if other people feel differently," he said.
As to why the loan was cleared by the RDA, only to be shot down by city attorneys later, Christensen had no clear explanation.
"It's fair to say we just made a mistake in preparing it in looking at what sources to use," the councilman said.