City of Tucson puts up $5 million to boost local business

2013-08-17T00:00:00Z City of Tucson puts up $5 million to boost local businessBy Darren DaRonco Arizona Daily Star Arizona Daily Star

The city of Tucson has deposited $5 million in Alliance Bank of Arizona as part of a pilot program to invest locally.

The deposit is the kickoff for Tucson’s latest endeavor to lend a helping hand to area businesses.

In May the City Council established the Community Banking Program with a goal of increasing the amount of money local businesses and individuals can access.

“(We) wanted to be able to give the local banks a way to turn around and invest in the local economy,” said city Finance Director Silvia Amparano.

The program was devised in response to a common refrain from the business community, said Councilwoman Karin Uhlich.

“A lot of times what we hear from businesses is that financing is a real challenge,” she said.

Uhlich said local lenders tend to help out local businesses at a higher rate than out-of-state banks, which is one reason they chose Alliance.

Another reason is the bank has a proven history of financing local business endeavors.

In its eight-year existence, Alliance Bank of Arizona has extended over $1 billion in loans in the Tucson area for projects, and in the process, promoted the growth of local businesses and organizations.

Some of Alliance Bank’s recent local projects include lending to the Ghost Ranch Lodge on Miracle Mile, solar panel projects at the Tucson Convention Center, Mercado San Agustin, La Paloma Family Services and One North Fifth/Depot Plaza.

Even though the city is prohibited from depositing more than $250,000 into any individual account, it is getting around that requirement by putting the money into a Certificate of Deposit Account Registry Service (CDARS.)

A CDARS allows Alliance Bank to place the maximum amount covered by the Federal Deposit Insurance Corporation in other banks, which reciprocate by depositing of an equal amount with Alliance to be used for loans.

The CDARS is good for two years.

After that, the finance department will evaluate the success of the program and make a recommendation to the council to see if they want to continue, expand or nix it all together, Amparano said.

Uhlich is confident the program will succeed.

“I think this demonstrates there’s a real potential out there to fuel the kind of lending that leads to success,” Uhlich said.In addition to the community banking program, Uhlich said, the city also has $20 million in federal money available for businesses looking to build or expand in Tucson.

She said anyone interested in the HUD 108 loan program can contact the city manager’s office.

Contact reporter Darren Daronco at 573-4243 or ddaronco@azstarnet.com. Follow on Twitter @DarrenDaRonco.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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