Since taking office, County Executive Brenton Davis has questions the operations and efficiency of county authorities and their boards, and the one in his sights right now is the Erie County Gaming Revenue Authority, ECGRA.

Davis is asking if the overhead for ECGRA is too high, just as its board is poised to approved a new contract for Executive Director Perry Wood.

Erie County government created ECGRA 15 years ago to independently distribute a portion of the local share of casino slots revenue, specifically for economic development.

Erie County manages the other half of the 1% slots revenue without restrictions.  The total local share currently is about $12-million, with $5-million going to ECGRA, $1-million going to the Erie County Landbank, and $6-million going to Erie County government.

Davis would like to see ECGRA which has three employees, operate with only a grant manager, and instead of renting offices in Knowledge Park, move into space at the Erie County Courthouse.  Wood, at the helm for a dozen years, says ECGRA is to operate independently, and at 7-8% for administrative costs is below the average for non-profit operating costs.

After tabling action on Perry Wood's contract at its January meeting, ECGRA's board met in executive session this week to discuss the matter.  They're expected to take action at their February meeting.

Brenton Davis is asking ECGRA for a comprehensive report on their loan portfolio.

Wood maintains that the information is transparent and always available to county government, especially with County Director of Administration Doug Smith serving as the county's liaison to ECGRA, but Wood said they will continue to answer any questions the county executive asks.

Attached are Davis' request and ECGRA's response:

January 22, 2024
Subject: Response for Comprehensive Loan Portfolio Report
To: Brenton Davis, County Executive
Mr. Davis,
Per your letter dated January 19, 2024, you requested the a) status, b)
delinquency/collectability, and c) loan summaries of ECGRA’s portfolio.
All this information is available in the annual audit performed by Maher
Duessel, approved by the ECGRA board of directors, and distributed to
County Council, the Administration, and County Controller. Additional
information is available to you through your liaison, Director of
Administration, Doug Smith, when it is reviewed in our monthly Treasurer’s
Report.
The staff has taken the liberty of compiling it here per your request. Keep in
mind that our annual reports are available online as well. If you have any
questions about grant awards, you can find a complete accounting here:
https://www.Grace.org/Grace-annual-reports
1. Enterprise Development Fund (EDF) – an Erie County based CDFI that
makes loans to small businesses located in Erie County. ECGRA’s
mission to catalyze economic development includes a focus on supporting and
growing the small businesses of Erie County. Currently under the administration of
the Erie County RDA, EDF was formerly an affiliate of Develop Erie. In 2018, Develop
Erie’s bankruptcy precipitated a shift to the RDA.
This loan is current and has never been delinquent. There’s no indication of this
being uncollectible.
Summary:
On September 13, 2012 and August 13, 2013, the Authority entered into loan agreements
with the Enterprise Development Fund of Erie County, Inc. (Fund) for $500,000 and
$800,000, respectively. The purpose of the loan was to provide loans to various entities in
Board of Directors
Dale E. Barney
Chair
Vice-Chair
Whitey Cleaver
Treasurer
Perry N. Wood
Secretary
Kelly S. Hess
Carol Loll
Robert S.
Oberlander
Gary J. Winschel
Terry Scutella
Ex-officio
Douglas Smith
Ex-officio
Perry N. Wood
Executive Director
the County area to create and retain jobs. In March 2018, the loans were restructured and
combined into one loan agreement. The loan agreement requires quarterly interest-only
payments at a rate of 1% per annum, until March 31, 2028. The loan has an outstanding
principal balance of $1,300,000 as of March 31, 2023. The Authority was notified in 2016
that an entity related to the Fund, The Greater Erie Industrial Development Corporation
(GEIDC), filed for Chapter 7 bankruptcy. The Authority has considered the uncertainty
surrounding the ultimate collectability of the loan in its determination of the overall
allowance for uncollectible notes. The Authority staff and Board will continue to monitor
this dynamic situation to confirm ongoing viability of the Fund.
2. Corry Industrial Benefit Association (CIBA) – a nonprofit serving as project manager
for economic development projects in the Corry area. CIBA worked with ECGRA on
eliminating blight and neighborhood rehabilitation in the city of Corry in a project
called: The Corry Neighborhood Initiative.
This loan has been repaid.
Summary:
In September 2014, the Authority entered into a loan agreement with the Corry Industrial
Benefit Association (CIBA) for $50,000. The purpose of the loan was to provide loans to lowincome individuals for energy efficient improvements for their homes. Payments are due to
the Authority when CIBA has issued a loan to an individual and CIBA receives principal
payments. The loan has an outstanding principal balance of $4,635 as of March 31, 2023.
3. Bridgeway Capital (BWC) & the Erie Growth Fund – a Pittsburgh based CDFI with an
office in Erie County, BWC is the largest mission-driven lender in Western PA. Their
mission to provide non-bankable businesses with lending capital mirrors that of the
EDF. They invest ECGRA funds in Erie County and match those funds 1-1.
This loan is current and has never been delinquent. There’s no indication of it
being uncollectible.
Summary:
In January 2016, the Authority entered into a loan agreement with Bridgeway Capital for
$1,000,000. The purpose of the loan was to create the Erie Growth Fund. The loan requires
interest-only quarterly payments at a rate of 3% per annum. The entire principal is due
January 2026. The loan has an outstanding principal balance of $1,000,000 as of March 31,
2023.
Bridgeway Capital (BWC) & The Erie Inclusive Fund – a small business focus within
the footprint of Erie County, this investment varies from the Growth Fund as it
focuses specifically on minority-owned businesses. These funds are matched 1-1.
This loan is current and has never been delinquent. There’s no indication of it
being uncollectible.
Summary:
In September 2018, the Authority entered into a loan agreement with Bridgeway Capital for
$2,500,000. The purpose of the loan was to create the Erie Inclusive Fund. The loan requires
interest-only quarterly payments at a rate of 1% per annum. The entire principal is due
December 2028. The loan has an outstanding principal balance of $2,500,000 as of March
31, 2023.
4. The Progress Fund (TPF) – also a CDFI, TPF invests in small businesses in Western
PA with a focus on small retail businesses along trails and near parks. These funds
are matched 1-1.
This loan is current and has never been delinquent. There’s no indication of it
being uncollectible.
Summary:
In April 2017, the Authority entered into a loan agreement with The Progress Fund for
$1,000,000. The purpose of the loan was to provide capital to rural businesses that create
jobs and invest in Erie County. The loan requires interest-only quarterly payments at a rate
of 2% per annum. The entire principal is due January 2026. The loan has an outstanding
principal balance of $1,000,000 as of March 31, 2023.
5. 1855 Capital – a mission driven venture capital fund affiliated with Penn State and
the Ben Franklin Technology Partners, they invest in small technology startups in
PA. ECGRA funds are directed to tech startups in Erie County. These funds are
matched 1-1.
This loan is paid back as the fund has exit events. There’s no indication of it being
uncollectible.
Summary:
In December 2017, the Authority entered into a loan agreement with 1855 Capital
Fund for $500,000. The purpose of the loan was to provide capital to technologybased businesses that create jobs and invest in Erie County. Minimum Interest, as
that term is defined in the loan agreement, is due to ECGRA semiannually.
Outstanding Minimum Interest, Fixed Interest, Participating Interest, and Principal
are due on the Maturity Date, as that term is defined in the loan agreement. The
entire principal is due December 2027. The loan has an outstanding principal
balance of $500,000 as of March 31, 2023.
6. Blue Highway Capital (BHC)- BHC is a rural business investment corporation (RBIC)
which works with banks on achieving their Community Reinvestment Act credit
goals. Although their fund is targeted to the North East United States, the ECGRA
investment is targeted to Erie County and matched 1-1. To date, the BHC has not
made an investment in Erie County.
This loan is current and has never been delinquent. There’s no indication of it
being uncollectible.
Summary:
In January 2019, the Authority entered into a loan agreement with Blue Highway
Capital for $250,000. The purpose of the loan was to provide capital to rural
businesses throughout Erie County. Minimum Interest, as that term is defined in the
loan agreement, is due to ECGRA semiannually. Outstanding Minimum Interest,
Fixed Interest, Participating Interest, and Principal are due on the Maturity Date, as
that term is defined in the loan agreement. The entire principal is due in January of
2029, unless extensions are exercised. The loan has an outstanding principal
balance of $250,000 as of March 31, 2023.
7. Bridgeway Capital – a special round of loans were made to the BWC during the
COVID-19 pandemic. ECGRA funds were used for this program and matched up to
$100,000 by Erie County.
This loan has no interest rate. There are two small business loans that BWC has
declared uncollectible. That information will be forthcoming in a final report.
Summary:
In March 2020, the Authority entered into a loan agreement with Bridgeway Capital
to develop two separate coronavirus COVID-19 emergency loan funds, one to
provide loans to 10 small businesses within Erie County that have demonstrated
actual negative economic impact due to effects of coronavirus COVID-19 in the
amount of $520,000, and one to provide loans to small Erie County nonprofit
organizations for the purpose of providing the nonprofit organization with resources
to aid in their mission based on local response to the pandemic in the amount of
$100,000. The loan bears zero interest. The entire outstanding balance is due in
October of 2026, unless the forgiveness clause is exercised. The loan has an
outstanding principal balance of $620,000 as of March 31, 2023.
8. Erie Center for Arts & Technology- a neighborhood-based nonprofit that renovated
the former Wayne School building became the county’s first new markets tax credit
project with gap financing provided by ECGRA.
This loan is current and has never been delinquent. There’s no indication of it
being uncollectible.
Summary:
In August 2020, the Authority entered into a loan agreement with Erie Center for Arts
& Technology for $500,000. The purpose of the loan was to rehabilitate Wayne
School building in support of workforce development, educational, and healthcare
programming anchoring a distressed neighborhood. Minimum Interest, as that term
is defined in the loan agreement, is due to the Authority quarterly. Outstanding
Minimum Interest, Fixed Interest, Participating Interest, and Principal are due on the
Maturity Date, as that term is defined in the loan agreement. The entire principal is
due in August of 2027, unless extensions are exercised. The loan has an
outstanding principal balance of $500,000 as of March 31, 2023.
9. Youth Leadership Institute- a nonprofit organization that borrowed funds from
ECGRA in anticipation of a grant from the Pennsylvania Commission on Crime &
Delinquency.
This loan is delinquent. We are currently in talks with YLI on a payback schedule
with an extended runway.
Summary :
In January 2022, the Authority entered into a loan agreement with Youth Leadership
Institute of Erie for $188,000. The purpose of the loan was to create the Community
Enterprise Financing Loan as a funding stream to make mission-related
investments within Erie County for the purpose of assisting established communitybased entrepreneurs that do not have access to available bank financing to provide
upfront and startup capital to fund startup costs related to the receipt of a grant or
service contract to provide a community enriching program. The Authority has
designed this program as a means for gap financing, as banks often require
collateral to make lines of credit available, leaving small budget or undercapitalized
organizations no alternatives but to use high-interest loans. This is a zero-percent
interest rate loan with a maturity date of February of 2023. The loan has an
outstanding principal balance of $121,824 as of March 31, 2023.
Regards,
Dale Barney, ECGRA Chairman