An unexpected intervention from an anonymous lender has saved Salt Lake City’s KCPW-FM from defaulting on a loan, ensuring that it will continue operating for the foreseeable future.
Leaders of the news station learned Oct. 25 [2011] that they could borrow up to $250,000 from the anonymous lender, enough to enable them to repay a loan from National Cooperative Bank due Oct. 31. The anonymous lender will give KCPW six months to repay, says Ed Sweeney, KCPW’s g.m.
The breakthrough came after a roller-coaster month for KCPW. Sweeney had thought the station was in the clear on Oct. 11, when the Salt Lake City Redevelopment Authority approved a $250,000 loan to the station. But the Authority backed out four days later after deciding that the loan diverged too far from its primary purpose of backing physical improvements to real estate, says D.J. Baxter, executive director.
“It became clear to us that the specific request that KCPW was making did not fit,” Baxter says. The Authority had rushed through the approval process because of KCPW’s tight deadline.
Sweeney’s fallback plan was to apply directly to the city for another loan, but that avenue was closed Oct. 25 when Mayor Ralph Becker announced that he would block any such support. Administrators would not have time to review the loan request in enough detail, he said, and the city generally is not in the business of lending money to nonprofits.
“Salt Lake City does not have a fund, process, or standards for approving these types of loans to nonprofit organizations,” Becker wrote in a letter to the City Council. Aiding one nonprofit without a fair process for helping others “would set a bad fiscal precedent for Salt Lake City,” he said.
Wasatch Public Media, licensee of KCPW, evaded disaster in the short term but still must repay a $1.8 million loan to NCB by Sept. 30, 2012. The 2008 loan was used to buy the license from KCPW’s previous operator.
KCPW will continue to raise funds toward repaying its debts. The recent loan “gave us breathing room,” Sweeney says. “The morale of the staff is much better, and there’s hope. And that’s all we can ask for.”