City Councilwoman Donna Frye issued a memo today to City Attorney Jan Goldsmith voicing concern over millions of dollars in loans owed to the city by San Diego’s three redevelopment authorities.

The outstanding loans, which were made out of money the city received from the federal government under the Community Development Block Grant program, were the subject of this story I wrote last week. The Department of Housing and Urban Development, which oversees the CDBG program, recently audited the city’s program and is expected to order that the loans are paid back. As I pointed out in the story, the repayment of those loans could radically reshape the city’s redevelopment efforts.

Frye’s memo reads:

After reading a June 10, 2009, article by Will Carless, it has come to my attention that a number of the city’s redevelopment areas may not have the ability to pay back the CDBG loans provided to them over the years by the city. This situation greatly concerns me.

Frye attached to her memo a slew of memos she exchanged with Carolyn Y. Smith, former president of the Southeastern Economic Development Corp., in 2007 regarding the outstanding loans. Those memos show that Frye was expressing concerns about the outstanding debt at least two years ago.

In her memo, Frye urges the city attorney to disclose the 2007 memos to investors in the city of San Diego and to HUD.


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