Multicultural director on board that lent money

Multicultural director on board that lent money

July 15th, 2011 by Cliff Hightower in News

Multiple vacant lots are photographed Wednesday in the 400 block of MLK Blvd., leading up to the former Renewal Barber Shop at 423 MLK Blvd., seen in the background.

Photo by John Rawlston/Times Free Press.

Sherrie Gilchrist, executive director of the Tennessee Multicultural Chamber of Commerce, also served on the board of a nonprofit entity that lent the Chamber more than half a million dollars, a Chattanooga Times Free Press review shows.

In 2008, Chattanooga Community Development Financial Institution lent $579,000 to the Chamber, which used the money to buy two properties on East M.L. King Boulevard for $507,000, county records show. The combined value of the two properties was assessed at $211,000.

While Gilchrist was the top executive of the Multicultural Chamber, she also was serving on the board of directors for the financial institution when the loan was made, a review of Internal Revenue Service Form 990s shows.

"Certainly there is potential there to question it," said City Council Chairwoman Pam Ladd.

But until Gilchrist's role in the loan transaction is known for sure, Ladd said she would have to give the executive director the benefit of the doubt.

Gilchrist could not be reached for comment Thursday, nor could Chamber board member John Taylor.

The Chamber has been under fire this week after City Auditor Stan Sewell released a review of the organization that questioned the group's business practices, financial management, high salaries, large travel expense budgets and expenditures. Among those were the purchase of five pieces of property along M.L. King Boulevard to build a Business Solutions Center thatnever materialized.

David Johnson, president of Chattanooga Neighborhood Enterprise and president of the Chattanooga Community Development Financial Institution, did not respond Thursday to requests for copies of minutes from the institution's 2008 board meetings. Johnson also did not respond to several other requests for information concerning the institution and the loan to the Chamber.

A review of the Form 990s shows the financial institution has a conflict-of-interest policy, but details of the policy were not available Thursday.

One Chattanooga councilman said Thursday he wants the city to conduct a formal audit of the Tennessee Multicultural Chamber of Commerce.

Manny Rico said he would talk to city officials about an official investigation. He was shocked when told Gilchrist served on the board that agreed to the loan.

"She was on the board of directors and CEO of the Multicultural Chamber?" he asked. "You can't do that."

REVIEW OF PROPERTIES

Hamilton County register of deeds records show three people sold the five properties along M.L. King Boulevard to the Chamber.

Three properties were acquired with $200,000 of a $500,000 U.S. Department of Housing and Urban Development grant. The other two were bought with the $500,000 loan from the Chattanooga Community Development Financial Institution.

The three parcels bought with the HUD grant once were owned by C.C. Henderson III, who died last year. The two other properties purchased with the loan were owned by Bishop W.C. Hunter, pastor of The World's Church of the Living God, and Frances A. McWhirter.

McWhirter could not be located. A voicemail message on Hunter's church phone states the church office is not accepting calls.

Records show the land Hunter owned appraised at $46,600 and was sold for $250,000. McWhirter's property appraised at $165,200 and also sold for $250,000.

The value of Henderson's three parcels of land was listed at $78,300. The Chamber bought them for $200,000.

Sewell's report questions these expenditures, and they are among 18 questions the City Council has asked Chamber officials to answer by Monday. One question in the report pertains to the purchases made with HUD money.

"Current tax appraisal on the land purchased for the [Business Solutions Center] land is $78,000," Sewell wrote. "What was the justification for paying $200,000 for this land?"

He also questioned the purchases with the Chattanooga Community Development Financial Institution loan.

"Tax appraisal on the two lots total $211,800," Sewell wrote. "What was the justification for expending $507,630 to purchase them?"

On Tuesday, Taylor attended the City Council meeting, asking for $75,000 in funding. He was rebuffed by the council.

Chamber officials had said they would attend the Hamilton County Commission meeting Thursday to ask for the same amount of money, but no one from the Chamber showed up Thursday morning.