It would be wonderful to say that the Tennessee Multicultural Chamber of Commerce, a local agency established in 1999 to help minority businesses, has had great success in helping grow such businesses, and that its financial situation is transparent and clearly in order. Regrettably, and despite mounting questions, little is known about either side of its business. Worse, MCC officials have declined to comment on much of anything to this newspaper’s reporters since questions arose about its operation over a month ago.
Meanwhile, the questions are stacking up, the clouds are getting darker, and two federal agencies – the FBI and the Department of Housing and Urban Development – have joined the hunt to find out how the MCC has been spending its money.
The two federal agencies want the MCC to document how it spent a $545,000 federal grant from HUD in 2006 that was to be used to build a Business Solutions Center. So far, the MCC has disclosed only that it used $200,000 of the HUD grant to purchase three parcels of land on M.L.King Boulevard, and used another $106,400 a year later to fund what seems to be an extravagantly overpriced plan to develop the still moribund project.
The Chattanooga Community Development Financial Institution, or CCDFI, an arm of Chattanooga Neighborhood Enterprise, is considering foreclosing on two as-yet-unused parcels of property for the same project that the MCC bought with a $574,000 loan from it in October 2008. That was after the nation’s housing bust and just as the financial implosion began.
One glaring question that begs an answer is why the MCC spent $507,000, the bulk of the CCDFI loan, to purchase the two parcels when their recorded appraisal value was just $211,000 – without obtaining a new appraisal. Given the nation’s financial meltdown at that moment, the purchase arrangement is startling. Another question is why the CCDFI also gave the MCC an interest-only payment plan for the first 33 months of the loan, which is now in default. Given the circumstances – the MCC’s executive director, Sherrie Gilchrist, is a member of the CCDFI board – the CCDFI’s fiscal laxity in this instance is troubling.