Mayoral candidate John Cranley has $75K unpaid loan, negotiated extension

Deal didn't involve taxpayer money

CINCINNATI -- Mayoral candidate John Cranley didn’t repay a $75,000 development loan by the original deadline. But Cranley did negotiate about a year ago with the nonprofit agency that made the loan to get an extension.

Local Initiatives Support Corp. (LISC) loaned the money in 2009 to City Lights Development. Cranley was a partner in City Lights, which was the developer behind the Incline Village project in East Price Hill.

First proposed in 2008, Incline Village was a $50 million mixed-use project planned along Grand Avenue that initially was envisioned to include condominiums, restaurants and a medical office building.

City Lights got the loan from LISC in 2009 to do pre-development work for the medical office building. After the economic crash, the firm scuttled plans for the building, although apartments and the Incline Public House restaurant have since been developed there.

The $75,000 loan was forgivable and wouldn’t have to be paid back if the office facility had been built. But if plans for the facility were cancelled, the loan was due to be repaid in 2011.

Knowledge of the loan's existence occurred when another media outlet was tipped off by an undisclosed source.

Cranley wouldn’t comment for this article. But his campaign manager, Jay Kincaid, said Cranley made arrangements nearly a year ago with LISC to repay the loan once the apartments and restaurant became profitable.

“It’s a private transaction between private entities,” Kincaid said. “There’s no public dollars involved.”

Kathy Schwab, LISC’s executive director, didn’t respond to a request for comment. Schwab supports Cranley’s opponent in the mayoral race, Roxanne Qualls.

“They came to an agreement a long time ago and John is in good standing with Kathy Schwab,” Kincaid said. “It’s a private deal and both sides have agreed not to discuss a private deal.”

LISC is a nonprofit company that uses donations to invest in redeveloping blighted areas, stimulate economic activity and improve access to education.

Eligible nonprofit partners and for-profit developers may apply for a full range of financial products to cover various stages of the real estate development process.

Cranley’s loan came from an account aimed at promoting redevelopment in Avondale, Covington, Madisonville, Price Hill and Walnut Hills.

Jens Sutmoller, Qualls’ campaign manager, said Cranley’s nonpayment hampers the issuance of loans for projects in other areas.

“Mr. Cranley’s failure to repay the loan negatively impacts other neighborhood projects and organizations,” Sutmoller said. “When he fully repays the loan, other neighborhood projects can continue to progress.”

Kincaid had a different view on the matter.

“Would you go ask Roxanne Qualls to give you her mortgage documents and prove she was up-to-date on payment?” Kincaid said. “Of course not, that is her private money. This is a private transaction, too.”

Cranley and Qualls, both Democrats, face off in the Nov. 5 election. The victor will serve four years as mayor, succeeding Mark Mallory, who cannot run again due to term limits.

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