The Benton Harbor Brownfield Authority spent a significant portion of its Jan. 8 meeting discussing protections tied to a $25,000 loan previously approved to support a local developer’s housing work.

Consultant Theresa Searls reminded the board that the prior motion extended a $25,000 loan repayable over five years with annual payments and 1.5% simple interest. The board had previously discussed securing the loan with a surety bond or a property lien.

Developer Ms. King told the board she had sought a surety but was advised by insurers and bonding firms that a financial-guarantee bond of the type requested “is not a product that is available in the current bonding market.” In a written statement read to the board she asked the Authority to proceed without the surety bond, arguing that her work has produced completed rental units and that she and her team have demonstrated commitment to local redevelopment.

Searls and other members said the Authority must protect its fund balance and recommended continuing to explore other mechanisms — including a lien on property, alternative insurance products, or tailored contract terms — and obtaining legal review before executing any loan agreement without enforceable protections. Several board members emphasized the need for a written policy and minimum requirements for any future direct financing so the Authority can apply a consistent standard.

No new loan disbursement vote occurred at the meeting; members directed staff to pursue additional research on bonding and collateral options and to return with recommendations and a draft agreement.

"We want to help, but we have to have some way to recoup our money," Chair Hall said, stressing the Authority’s need to preserve funds for future projects.