Glenn Gordon, owner of Good Karma Cafe and Health Foods, said he is grateful for the Urban Development Action Grants program. He said his loan was instrumental in getting the business started. (Bruce Farrin/Rumford Falls Times)

RUMFORD — In the 1980s and ’90s, the federal government doled out hundreds of millions of dollars in Urban Development Action Grants to spur economic growth in cities across the country.

Rumford received its grant in 1989, using it in a loan program that remains active today in assisting existing businesses and those just getting off the ground.

At the urging of Selectman Jim Windover, the select board held a lengthy discussion at a recent meeting about the program and how it operates.

Finance Director Debbie Laurinaitis, who tracks the loan payments of businesses in the program, said the town has not always been strict about the payments, “especially when someone is having a bit of a tough time.”

But, she noted, town officials have always stayed in contact with the businesses and kept the town manager advised.

In the estimated 30 years she has been working for the town, Laurinaitis said, she could only recall three businesses that have not repaid their Urban Development Action Grant loans.

Windover said he can understand about a business missing a payment.

“But what’s going on with some of these is that we have no idea,” he said. “But it would be nice to have bimonthly updates on these, an idea of where some of these loans stand.”

Selectman Peter Chase said: “We need to give these businesses a little bit of leeway. These businesses are working to get their business off the ground. You’ve got to trust these people.”

And Selectman Mark Belanger said, “So then we modify the loan agreement” or not have these contracts.

He expressed concern that having these outstanding loans have depleted the fund to the point that if a business asks the town for help, “we wouldn’t be able to help them.”

“I’m all about extending, but probably we should renegotiate, and get the right figures,” Belanger said. “We give all this money away, then we don’t hear too much, or a lot of time goes by. And at the same time, get updates about what the heck is going on.”

Town Manager Linda-Jean Briggs said: “We have a number of local dollars available for us to assist businesses beginning or improving their business. It is totally different than a loan from a lending agency. It is a community service.”

Board Chair Chris Brennick added the town is not looking to make money with this program.

“Our goal,” Brennick said, “is to spur economic development.”

Glenn Gordon, owner of Good Karma Cafe and Health Foods, said they became a recipient of a UDAG loan “at a time when we needed some working capital.”

“We were just getting going, maybe six to eight months in,” he said. “It was instrumental in keeping us going, and we’re very grateful for that program.”

Tony Carter, president of Pennacook Falls Investments, said he came to the board two weeks ago to ask for an extension of their UDAG loan for the hotel project.

He questioned some of the comments made about the program.

“Who else is trying to make economic development happen in Rumford?” he asked.

Carter said he personally guarantees that loan, and has enough assets to cover it. He said he believes a 90-day extension of the loan will be sufficient.

Briggs said Pennacook has three loans, totaling $125,000.

Brennick made a motion to consolidate the three loans with the same 4 percent interest rate and that Pennacook Falls Investments pay the late interest fees of $522 associated with the loan.

The board voted 4-0 to approve that motion and a an informal extension of 90 days to avoid paperwork costs with the town attorney.

Carter said he was willing to accept those terms.

Another large UDAG loan is with Moon Tide Springs toward the building of a bottling plant.

Briggs said the loan was for $133,323. She said Moon Tide sent a $10,000 check overnight Thursday to bring it to current on its loan payments. It now owes $78,000.

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