I have just released our audit of Seedco, a company under contract to the city’s Office of Economic Development. The audit paints an ugly picture of dismal failure by this company over the three years it has been under contract. Worse, when the contract was renewed the last time, the company was chastised for its failures and promised to do better: So much for that.
Seedco was brought on-board by the city three years ago because it was claimed that loan funds previously loaned by the Office of Economic Development would be more effectively handled by this private entity with better outcomes. That has not happened. In point of fact over the last two years, OED’ loan performance far outperformed that of Seedco For instance, In 2008, OED made 47 loans for $18.1 million while Seedco only made six loans for $950,000.
The contract is once again up for renewal. Denver City Council will take this matter up next week. I don’t know what Council may do, but I do know that if I had a vote on Council, it would be a resounding NO to renewal.
They have failed to abide by the terms of the contract, seeming to treat those terms in the most flippant and cavalier manner;
They have failed to meet the performance measures stipulated in the contract, including the all-important job creation standards;
They have failed to return over $146,000 owed to the city for ten months;
They have spent tremendous sums – and what I would term highly inappropriate sums – of money on overhead, travel, and executive salaries.
I cannot be more displeased with the performance of Seedco, because the economic-generator that this loan program is supposed to be is being inhibited by Seedco’s poor performance. In these difficult times, when tight credit is negatively impacting Denver’s economy, that is performance we cannot afford.
You can view the audit here: Seedco Audit