City Asked to Reimburse $1.4 Million Granite Park Loan After Default
The public costs to run Fresno’s Granite Park sports complex may soon increase by more than a million dollars.
The city-owned recreation facility featuring multiple sports fields, batting cages, and concessions is leased to a nonprofit group to operate. One of the architects of the lease says because of COVID closures, the Central Valley Community Sports Foundation defaulted on a $1.4 million loan that paid for upgrades to the park.
“Improvements that were made to the park were done at probably half the cost of what it would cost the city to do,” TJ Cox, a former U.S. congressman and former executive with CVCSF told GV Wire in an exclusive interview.
Former Congressman Signed Off on Loan
“The city should really be stepping in to say, how can we help rather than constantly really trying to work against the Central Valley Community Sports Foundation and Terance (Frazier) out there on the good work they’re doing.” — TJ Cox
The 2016 loan was guaranteed by Central Valley NMTC Fund, LLC, a private company that helps connect community projects with private financing through federal tax credits. Cox was the principal behind that company when it guaranteed the loan. He sold the firm prior to serving in Congress from 2019-2021.
The financing was a source of pride for national community development lender Clearinghouse CDFI. The loan to Granite Park is still touted on the CDFI website, with promotional materials detailing how the funds would be used to upgrade the park, including the rehabilitation of baseball fields and a remodeled concession stand.
Cox said the loan was a 10-year note. It is unclear how much was paid back. But Cox said during the height of the COVID-19 pandemic, CVCSF was granted forbearance and only required to make interest payments for a period of time. This was a lifeline offered by many lenders as stay-at-home orders prevented businesses across the country from operating.
Loan Fell Into Default in January
In January, Cox said, Clearinghouse CDFI told Central Valley Sports Foundation that the balance of the loan payments delayed by forbearance needed to be paid. The foundation was unable to come up with the money, so Central Valley NMTC was on the hook once the loan fell into default.
Terance Frazier, CVCSF president, declined comment, and Clearinghouse CDFI did not respond when contacted by GV Wire.
Central Valley NMTC is now asking the city for reimbursement. The request was confirmed by sources who would not speak on the record because of the sensitive nature of the transaction.
Cox, who is no longer involved with CVCSF, says the city should pay. He says Central Valley NMTC has done a “favor to all the parties here.” Without the firm’s intervention, “the park would be closed today,” Cox said.
He noted that city leaders have twice proposed, then scuttled, amended agreements with Granite Park’s operators that would have provided additional funding.
“And what Clearinghouse (CDFI) had expected was that, one, that the city would have either … satisfied the loan, which they were supposed to the year before, or provide some type of additional revenue to Central Valley Community Sports Foundation so that they could, in fact, catch up with their loan,” said Cox.
Park Attracts 500,000 People a Year
Despite ongoing funding issues, Cox says the community has continued to benefit from the amenities Granite Park now provides.
“Over the last five years, the residents of the city have been very much enjoying the park, and the city hasn’t been paying a cent more than what they did to maintain the park as a weed field back in 2015,” Cox said.
Yearly attendance is in the 500,000 range, he added.
“That really flies kind of opposite of what (Mayor) Jerry Dyer recently said … that the deal has not been working out very well. It’s been working out fantastic for the city and for the residents of the city,” Cox said.
The city council discussed the loan reimbursement issue in closed session on June 30 and July 21 under the heading of “potential exposure to litigation,” but did not publicly report that any action was taken.
City Councilmembers Evaluating Plans
“Any future expenditures should be made with the best interests of taxpayers and park users in mind.” — Councilman Tyler Maxwell
Councilman Tyler Maxwell represents Granite Park, part of District 4 in central-east Fresno.
“My top priority for Granite Park has always been to keep the park operational for the benefit of the thousands of children across our city who use the park every year. I have spent a considerable amount of my first 18 months in office brainstorming solutions to maximize the operations of the park, as well as foster cooperation between the City of Fresno and the park operators. Any future expenditures should be made with the best interests of taxpayers and park users in mind,” Maxwell said by text.
Covering the loan is a policy discussion Councilman Mike Karbassi is willing to consider.
“While I am keenly interested in finding solutions for Granite Park and coming to a better understanding between the City of Fresno and CVCSF, I will do my due diligence and ensure that any proposals regarding additional expenditures are in the best interest of Fresno taxpayers,” Karbassi wrote via text.
Appraisal Puts Granite Park’s Current Value at $8 Million
When Frazier asked the city in 2018 to double its $150,000 annual subsidy, the city responded with an audit that questioned CVCSF accounting practices.
Frazier sued the city, claiming its findings were faulty and the audit report should not have been publicly released. The lawsuit called the city’s audit “premature and misleading.” That case is still pending in federal court.
A potential multi-million dollar settlement of the lawsuit in 2021 was nixed at the last minute at the urging of Fresno County District Attorney Lisa Smittcamp. Citing an investigation into possible violations of the Brown Act — the state open meeting law — the settlement proposal was pulled from the city council agenda. Earlier this year, Smittcamp cleared four councilmembers of wrongdoing in the matter, filing no charges.
No new settlement offers have been made, based on published city council agendas. Cox says the inaction is unfortunate.
“The city should really be stepping in to say, how can we help rather than constantly really trying to work against the Central Valley Community Sports Foundation and Terance (Frazier) out there on the good work they’re doing,” Cox said.
Related Story: Despite DA Clearing Councilmembers, No Frazier Lawsuit Settlement Scheduled
Cox said when CVCSF took over, the park was valued in the $2 million range.
“I know that there was an appraisal last year that values the park at over $8 million,” Cox said.
GV Wire viewed the appraisal report which makes those statements. It notes that the facility’s upgrades ultimately benefit the city, as the property owner.
“The contract rent being paid by CVCSF to the City of Fresno is below market. This is likely correct, because the ground lease rent is completely offset by the capital improvement contribution,” the report says.