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Editorial: ON CDFA grants, state auditors are wrong

Only under the most crabbed and unimaginative reading of New Hampshire law would grants that helped to finance the expansion of the Boys & Girls Club of Greater Concord, the rebuilding of the Friendly Kitchen soup kitchen and the upgrade that allowed the nonprofit Red River Theatres to stay in business be deemed ineligible for aid from the New Hampshire Community Development Finance Authority.

Those three enormously valuable projects were among many improperly approved by the authority for participation in a tax credit program operated by the authority, state auditors said in a new report. The auditors are wrong, and legislators should give little credence to their recommendation that the independent authority strictly limit its assistance to projects that directly increase housing or employment. That is not what the law says, what the intent of lawmakers was when they created the authority, or what New Hampshire communities need from an entity that’s done so much good for so long.

Projects specifically designed to add to the region’s stock of affordable housing did win the auditors’ blessing. But projects whose link to housing or employment was less direct did not. Among those, in addition to the three Concord projects, were tax credits used to upgrade Manchester’s Palace Theater, to create a job-shadowing database for six Lakes Region high schools, to build a business incubator in Plymouth, and to expand internet access to thousands of businesses and residences.

All those projects, of course, do play a role in fostering economic development. The connections may not be as ankle-bone-to-knee-bone direct as the unimaginative auditors would like, but they’re not hard to make.

The law defines a “project” for purposes of authority assistance, as economic activity that creates or preserves primary employment for low-income people and reduces “conditions of blight, economic depression or widespread reliance on public assistance in a target area or of a target population.” An amendment to the law declares that its provisions “shall be interpreted and construed liberally,” a necessity given the breadth of the authority’s mission.

Let’s stick with just the Concord examples. The Boys & Girls Club runs an after-school program that includes a bus service for students whose parents lack transportation and can’t pick their child up before the club’s 6 p.m. deadline. That service, which is not day care but a comprehensive program that includes help with homework, makes it possible for many parents to work. That reduces the need for public assistance in the short run and, since the program increases the odds that a student from a low-income family will succeed in school, probably in the long run as well.

Similarly, the thousand-plus meals the Friendly Kitchen serves each week reduces its clientele’s need to rely on city welfare services and other assistance. More than a few of those who turn to the kitchen for meals work but don’t earn enough to feed themselves or their family. By feeding them and helping to keep them healthy, the soup kitchen keeps them on the job. In other cases, the money saved by taking meals at the Friendly Kitchen makes it possible to pay rent, which is as direct a link to housing as there is.

As for Red River Theatres, the independent nonprofit movie house that has become an anchor of downtown, Hollywood’s rapid decision to switch to an all-digital format meant the theater had to quickly convert or close. That would have meant a direct loss of more than a dozen full- and part-time jobs and, since the theater’s patrons are responsible for an estimated $900,000 in annual economic activity downtown, the loss of many more jobs in restaurants and shops. And again, a lost job can mean a lost home or apartment.

The authority should make the many housekeeping changes the state auditors suggest, but the whole state would lose if it adopted their narrow interpretation of the authority’s mission.

Legacy Comments1

The "Red River Theatres" is nothing more than a business that chooses to show a certain type of movies - nothing more and nothing less. It serves no charitable function and charges every customer a price to see a movie. It is no more an "anchor of downtown" than any other business. Same goes for the Manchester’s Palace Theater. Why is the local internet carrier (Comcast in my case) not footing the bill to expand to more businesses and private customers. Sounds like a subsidy for the local carrier. How can the LGC in Concord be called a non-profit, it generates tens of $millions in “profit” and was re-organized (illegally) to try to generate even more. These businesses serve the community by offering a service - the same as any other business……… What needs to be changed is the definition of a "non-profit".

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