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Critics, though, say MOED is often too softhearted and not hardheaded enough when making loan decisions. Denver City Councilman Ed Thomas says that anyone who fails to pay his or her taxes doesn't deserve a government loan with a bargain interest rate--since the loan money, after all, comes from people who do manage to pay their taxes. "There's got to be some kind of financial responsibility there," Thomas says. "The line should be drawn at sound financial management. If it's not there, goodbye."

HUD's Porter says it's always a concern when loan recipients fall behind on their tax obligations. But he says agencies like MOED shouldn't automatically exclude people with tax debts and other financial problems from receiving assistance. Sometimes a businessman's troubles arise, Porter says, because of "circumstances beyond his control."

"You have to take a look at the individual situation and see how they got in that position," Porter says.

In 1987, for instance, MOED loaned Norman Harris Sr. $215,000 at 3 percent interest to open a liquor store at 2445 Welton Street. The city required him to make monthly principal and interest payments of about $1,500.

Since then, however, Harris and the business have floundered financially. In 1991 Harris asked the city to allow him to stop paying interest on the loan; he now makes monthly, principal-only payments of just $320. Two years ago Harris was sued by a travel agency for allegedly writing a bad check worth $8,200. According to court records, Harris promised to pay the travel agency damages of $12,000 in four installments, but a judge ordered a bench warrant for his arrest after he neglected to make the first payment.

But Harris says that's not the whole story. He used to be happily ensconced in a different building up the street, he says--but the city asked him to move so it could pursue other development plans for that site. After MOED sweetened the deal by offering him a loan, he says, he agreed. A key inducement, though, was that MOED was helping another entrepreneur open a supermarket a few doors down from his new space, Harris says. When that market went out of business, Harris was stranded with a high loan payment and not enough traffic flow. Without the reduction in his loan payment, Harris says, he might have gone under. "The rent is still a little high," Harris says, "but I think I can survive."

Manuel Fernandez, owner of the Mammoth Events Center, did not return repeated phone calls, so it's not clear whether the center's cash flow problems are serious enough to endanger its $180,000 MOED loan.

But MOED seems as aggressive as ever as it tries to revitalize East Colfax. MOED loaned concert promoter Doug Kauffman $200,000 so he could buy and refurbish the Ogden Theatre, which, since it opened in September 1993, has become a successful concert venue. "Their [MOED's] help was invaluable to me," Kauffman says. "Not just the money--their advice and everything. It would have been really hard to do it without them."

Just last year, the Bluebird Theater opened its doors at 3317 East Colfax as a combination concert hall and movie house, thanks in part to a $220,000 renovation loan from MOED. Theater co-owner Evan Dechtman says MOED was anything but lax about making the loan, thoroughly scrutinizing the viability of the project before handing over the money. "They put us through the wringer," Dechtman says. "They're not just out there to give taxpayer money away."

And even if the Mammoth should fold in the future, critics shouldn't be "too quick to say that's a boondoggle," says Dave Walstrom, executive director of the Colfax on the Hill neighborhood association. Without the city's assistance, he says, the Mammoth might well have been vacant for the past several years. An empty building "breeds crime, it breeds drug dealing, it breeds prostitution," Walstrom says. Having the Mammoth open for business has been "worth a lot to the neighborhood," he says.

Walstrom's support for MOED isn't surprising; after all, Colfax on the Hill is itself a beneficiary of the agency's largess. A few years ago the group borrowed almost $350,000 from the city to buy and demolish the old Clarko Hotel, a longtime eyesore adjacent to the Mammoth. The neighborhood group services that loan by leasing the now-vacant lot to the events center as a sort of entrance plaza, Walstrom says.

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Arthur Hodges