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Citing need to restructure, neighborhood coalition will apply for new federal loan despite objections

Southwest Neighborhoods, Inc. plans to get a second Paycheck Protection Program loan, following a vote by the district coalition's board of directors.

The coalition's board voted 9-4 during an emergency meeting on April 21 to apply for a second-round PPP loan, in hopes of hiring temporary staff and helping the organization restructure and get back on its feet. The organization expects to receive about $71,000.

"It's only going to be for about six months, but it does a lot for the board," SWNI President Leslie Hammond told the board in April. Hammond said the funds would need to be used within six months, and the loan is likely to be forgiven, she said, relaying what the organization was told by the lending bank. The plan is to try to hire a few employees to help largely with administrative functions and tasks, web postings, technology, a monthly newsletter and other duties.

SCREENSHOT - Southwest Neighborhoods Inc. President Leslie Hammond introduces an agenda item during an emergency board meeting to approve the application for a PPP loan in April. Hammond said SWNI should be able to abide by the parameters of the loan program, which aims to keep people employed.

"They don't care how many people we hire, they don't care what we pay them, they don't care how many hours they work, they just want us to use good judgement," Hammond said. While former employees who had to be laid off could be hired back, it's unlikely the group will recruit its former executive director of 40 years, who retired earlier this year.

Still, any help is better than trying to run the organization solely on volunteer labor, some said.

"Absolutely, go for this loan," Patty MacMahon urged the board. "We are struggling for survival. We are out there looking for grants, looking for (funds.) We can serve our community, we can bring money into our community, we can employ people."

This will mark SWNI's second PPP loan since 2020. The group's initial loan helped bridge a major funding gap, but also came with some ire from the city and a few of SWNI's own members.

Last July, after receipt of a nearly $66,000 PPP loan, the Civic Life office notified SWNI that its plans to repurpose some of the annual grant money it previously received from the city were unacceptable. Not long afterward, the city withheld funding from the neighborhood coalition and commissioned an audit of SWNI. In March of this year, Commissioner Jo Ann Hardesty notified the group that she was severing the coalition's role with the city.

The 17 Southwest Portland neighborhood groups that SWNI was once contracted to oversee and serve as a liaison to, instead are now serviced directly by the Civic Life office.

At least one complaint about SWNI's receipt of PPP loans has been lodged with the lender, Umpqua Bank, by former SWNI member Marie Tyvoll. Tyvoll also has an active lawsuit against SWNI over public records.

SWNI wasn't the only district coalition to get a PPP loan. Neighbors West Northwest also received a loan.

"Having met the program criteria, the (Small Business Association) awarded NWNW $33,400 based on our payroll history," Mark Sieber, executive director of the Northwest Portland neighborhood coalition, said. "The Office of Community and Civic Life had no concerns, understanding that NWNW's funding from other sources is not in the purview of the city."

Without direct responsibility to the neighborhood groups, SWNI now finds itself in uncharted territory. The group has one remaining, part-time employee who does bookkeeping. Monthly board and executive committee meetings are still held, but some say they're unsure of what SWNI's mission is, and should be, moving forward.

"I don't see any reason not to take this loan," said Frank Rudloff of the Multnomah Neighborhood Association. "I think we can use it effectively, but I think we need to focus on what we become…"

Others weren't as encouraging.

Ed Fischer, of the Homestead neighborhood, said he's one of several SWNI members with concerns about what happens if the loans don't get converted to grants.

"I respect what you're trying to do in getting some people to try to reorganize," Fischer said. "Just because it's legal, doesn't make it correct. Yes, we technically could qualify for this loan, but it doesn't feel right to many of us."

Fischer said the federal PPP funding came about as a way to aid small businesses who were impacted by COVID-19. Technically, SWNI's budget didn't dry up due to the pandemic. It was the result of the city pulling SWNI's funding and never restoring it.

With a small quorum and the loan application approved, the SWNI board agreed that any unused portion of the PPP loan would be paid back, or converted to a loan. Board leadership called the move "a new beginning" for SWNI and its executive committee members.

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