MOUNT CARROLL – Some people question the city's loan that paid for a nonprofit group's renovation of a downtown building.
But that loan isn't in default.
That's not the case with a loan to the nonprofit Campbell Center.
In 2006, the city lent $50,000 to the Campbell Center, which is in the red-brick buildings of the former Shimer College.
That money came from the city's $180,000 revolving loan fund, which was made available by the state. The intent was to lend money to job-creating businesses and organizations.
City Clerk Julie Cuckler said the center had paid $8,300, but at this point is in default by $41,700.
The group wasn't able to do the hotel project that it had planned, Cuckler said.
Russ Simpson, president of the Campbell Center board, said his organization is obligated to pay.
"We have no intention of walking away from that [promissory] note," he said. "We have a great relationship with the city. I wouldn't want to drive a wedge."
Under the state revolving loan program, a project must create or retain a job for every $15,000 lent. That would mean at least three for Campbell Center, but Simpson said his group couldn't document any jobs created by the $50,000. He said the money might have had the "residual effect" of increasing activity at the center.
"The jobs that were expected to be created by that project didn't happen," he said.
The Campbell Center planned to develop a hotel and training center on the property, primarily aimed at National Park Service employees. The money was used mainly for engineering fees, Simpson said.
The center has done much training for the National Park Service, Simpson said, but not nearly as much as originally intended.
The center got the loan before the economic recession, which Simpson considers the primary reason the project didn't happen.
"It was a risk to begin with, as any venture like this would be," he said. "With decreasing economic conditions, it was more of a risk. The engineering study advised we go no further."