Johnstown’s city council last week authorized the administration to collect outstanding city loans made to businesses, an important piece of attracting new economic development to the area.
Federal dollars allowed Johnstown to make the original loans, which funded job training and secured office space, among other things. They were meant to be part of a revolving fund, said city manager Arch Liston. Historically, he said, the city hasn’t been great at calling those loans in, which means there’s less money to help new businesses.
“Obviously if we can capture a substantial amount of money that we can offer back into the community, it does help in economic development,” said Liston.
There are outstanding loans adding up to about $1 million.
Liston said while it might not seem like a lot, recouping those dollars improves Johnstown’s overall position.
“I mean, if we can do economic development, we can get new businesses in here, it establishes a larger tax base,” he said. “And then it’s by establishing a larger tax base, you obviously are able to collect more taxes and reduce the impact on the regular taxpayer.”
Liston will work with the city’s solicitor to begin collection.
Since 1992, Johnstown has been under Act 47, Pennsylvania’s program for distressed municipalities.