Council accepts LB840 development report; advisory committee urges stricter application review and fewer creative loan workarounds

The Seward City Council accepted the semiannual report on the LB840 development program and heard recommendations from the Citizens Advisory Review Committee aimed at tightening application review and limiting unconventional loan structures.

City staff presented the report covering activity from Aug. 1, 2024, through Dec. 31, 2024. The committee reported a cash balance of $352,234.80 on Dec. 31 and noted recent loan disbursements and pending commitments, including a $100,000 loan to Crouches Farm Hardware, a $179,147 loan to Squire Awards, a pending $200,000 payment to Focus Properties for apartments under construction, and a $64,000 loan repayment to address a CDBG obligation for Bubble Rocket Brewing. The committee also noted a potential $50,000 grant to SCCDP tied to an Economic Development Administration (EDA) grant; that award was pending and would be rescinded if not ultimately awarded.

The CRC made three specific recommendations for the LB840 (often written LB 840) committee: 1) require joint review of applications by the city administrator, the city finance director and the LB840 committee chair before bringing applications forward; 2) avoid accepting external cosigners as a substitute for applicant equity or conventional collateral and instead encourage applicants to pursue private financing when outside cosigners are the primary source of leverage; and 3) evaluate applications on the basis of the applicant’s original request (the “ask”) rather than beginning extensive negotiations that materially change the scope of the requested assistance.

Committee members said the recommendations grew from recent experience in which the committee spent multiple hours on single applications and in some cases negotiated arrangements involving cosigners and unusual collateral that complicated administrative oversight. One committee participant told the council, “We had a 3 hour meeting on 1 application the other day because we could not get off,” and the committee urged clearer internal review steps to reduce staff and volunteer time demands.

Council discussion endorsed the advisory committee’s suggestions as improvements to oversight and to reduce the volunteer burden on committee members. Council members also discussed whether an application fee could improve application quality and whether refusal to bring incomplete applications forward might reduce staff workload. The council voted to accept the report; the roll call showed the motion passed with recorded votes in favor by Francescato, Kayler, Tanias, Colterman, Miller, Singleton and others as displayed.

Action taken: council accepted the LB840 activity report and recorded the CRC’s unanimous recommendations for procedural changes; no immediate changes to LB840 policy were adopted at this meeting and staff will carry the advisory recommendations to the LB840 committee for consideration.

Votes: the motion to accept the report passed on recorded roll call as displayed in the meeting record.