Ironwood February 6, 2010

Tonight the City of Ironwood Commissioners will consider approval of promissory note with Josephson’s Nursing Home for the repayment of the Revolving Loan Fund.
 
The note will most likely be approved as there currently is no obligatory signature for the $100,000 loan.
 
More than two years ago with a great deal of hype, the City Commission approved a $100,000 loan to Josephson’s Nursing Home.  The funds emanated from Ironwood’s Revolving Loan Fund and were to be used for the construction of  a new addition to the existing building.
 
The loan package which did not include a signed loan agreement was sent on to the Gogebic Brownfield Development Authority. It was sent by former Community Development Director Pat Merrill. An undisclosed person at the Brownfield Authority sent the $100,000 check to the owners of Josephson’s.
 
The city has been negotiating with Josephson’s stockholders for the repayment of the loan. Up to now none of the Loan money has been repaid.
 
The situation worsened when the State of Michigan began coercing Counties and Cities in the western U.P. to consolidate their loan funds.  At a recent Gogebic EDC meeting,  it was learned that the Lansing Banditos stood ready to charge bad loans back to the government entity that issued the loan.