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Questions hold up $250,000

People pushing a groundbreaking regional growth plan won a key funding vote Monday, but it may be put on hold because critics question the honesty of the process.

The Stanislaus Economic Development and Workforce Alliance's executive committee unanimously recommended giving $250,000 to Stanislaus County and its nine cities. If approved by county supervisors, who control the county's Economic Development Bank, the county and cities would use the money to develop a historic countywide growth strategy.

"This adds up to regionalization," said Modesto Mayor Jim Ridenour, a member of the alliance's executive committee.

But critics said Monday afternoon's vote ignored the development bank's mission and skirted its normal application process. A few hours later, Supervisor Jeff Grover, a strong proponent of the $250,000 grant, said he will recommend pushing "pause" until everyone gets back on board.

"Several (Modesto) City Council members are upset about the proposal," Grover said after the meeting. "There is enough misinformation that we need to stop and see what the issues are, get them on the table and circle back."

Why critics are concerned

Critics are concerned that:

The money would be a gift, not a loan.

County leaders had envisioned revolving loans that would help attract jobs when they established the Economic Development Bank six years ago. The loans would pay for infrastructure improvements — roads, water and sewer lines, for example — needed to lure industry.

"You're using it for a different purpose than what was intended," Supervisor Jim DeMartini said Monday. He is not a com-mittee member, but would vote ifthe proposal goes to the full Board of Supervisors.

Thecountyandcities rushed the proposal around the normal application process, requesting immediate action instead of waiting a few weeks for a scheduled application cycle.

They also bypassed normal review by an advisory committee, going directly to the executive committee instead.

They failed in a California Partnership for the Central Valley Seed Grant application.

"You tried to get the money from the state, they turned it down and now you're trying to rob the Economic Development Bank because you didn't get what you wanted," DeMartini said, referring to the executive committee.

He noted that the countywide growth strategy effort is "kind of a result of the SOS thing." He was referring to Stamp Out Sprawl, a growth initiative that qualified for last year's ballot before county leaders stalled a public vote until June 2008.

The SOS initiative would transfer power over subdivision approvals in unincorporated areas from county supervisors to voters. Its supporters say the countywide growth strategy is an official counterpunch to the initiative; versions of both could go before voters on the same ballot.

Monday's vote amounts to "theater of the absurd," said former Modesto Councilman Denny Jackman, who wrote the SOS initiative. "This is the art of misdirection: 'Let's confuse the public so much that they vote "no" on everything.'"

Bank has $3.4 million available

Ridenour and Grover contended Monday that the countywide effort got under way a year before Jackman and Modesto Councilman Garrad Marsh began circulating petitions for the SOS initiative.

Though DeMartini said cities should pitch in instead of "robbing" the Economic DevelopmentBank,Ridenourand Grover said the cities already have devoted expensive staff labor to the effort and shouldn't have to fork out more.

Grover noted that most cities have nowhere near the industrial land "shovel-ready" for new companies that would be needed to attract more jobs. The money will help them develop a strategy to correct that, he said.

"For us to fail in the entire process because we're not willing to use the money that's sitting there would be a shame," Grover said.

The Economic Development Bank has few prospects for spending its $3.4million, said Bill Bassitt, the alliance's chief executive.

Supervisorshaveloaned $4.4million from the development bank to 17 projects and granted $586,300 to nine projects since 2001.

Straying from intended use?

Some leaders Monday said supervisors have been inconsistent. Though the bank's found-ers said its focus would be helping cities build roads and utility lines to attract business, super-visors gave $150,000 to the State Theatre renovation three years ago.

"There has been an evolution in how we used it," Grover said.

Bassitt read part of a letter from Turlock City Manager Tim Kerr, who questioned the end run around the normal approval process. Committee members noted that mayors of all nine cities in Stanislaus County signed the grant application, requesting immediate action.

"They want to get the process started right now," said committee chairman Paul Van Konynenburg.

Committee member Ralph Curtis noted that the bank is flush and isn't drawing many proposals. Using its money for the growth strategy "may be a bit of a stretch," he said, "but it seems like a good project and it seems ultimately related to economic development."

Grover eventually called The Bee to say he would try to put the grant on hold while mustering more support.

"Sometimes," he said, "it looks like conspiracies are going on that aren't."

Bee staff writer Garth Stapleycan be reached at gstapley@modbee.com or 578-2390.

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