On Friday afternoon, September 15th, the Town of Spruce Pine responded on Facebook to allegations posted earlier in the day by the administrators of the “Let’s Talk Spruce Pine” Facebook page. The Town of Spruce Pine post said the questions were concerning the Town’s economic development revolving loan program, which began in the 1980s. The town said, in order to be transparent, they would undertake the process of reviewing every loan and address outstanding issues and questions to present findings at a special called public meeting.
The allegations made on the “Let’s Talk Spruce Pine” Facebook page were that according to a 2022 audit, in 1979 the town was awarded a federal government Urban Development Action Grant” in the amount of $600,000, of which 100% was to go to Henredon, Inc for plant expansion. Henredon, Inc. was required to repay the loan to the Town within ten years. The town did not monitor this loan, and it was in default until the last payment was received in 1991, twelve years late. Upon repayment of the grant proceeds, the Town of Spruce Pine was given permission to use the funds “as needed”. In 1988, the Town Council established a revolving loan fund, using these funds and set the terms, both interest rate and length of loan. According to the allegations many of these loans were never recorded as satisfied. The town has stated there are only four outstanding loans. However fifteen loans have never been recorded as satisfied, according to Let’s Talk Spruce Pine. Besides the original $600,000 of taxpayer funds that the Federal Government gave to the Town of Spruce Pine, Let’s Talk Spruce Pine says they have found another $837,200 in loans made, some as recent as 2019.
The allegations go on to claim that current and former Town Council members received loans for their businesses, and one financial lender along with two of the town’s auditors received taxpayers funded loans.
It is important to note that it is legal for a Town to make loans. The Town of Spruce Pine has now stopped the loan program and the town finance officer has stated that the remainder of the funds allocated for this program are still intact and could still be used for economic development and downtown revitalization.
Let’s Talk Spruce Pine has posted a spreadsheet with information showing borrowers, defaults, and amounts granted, and who granted them.
Let’s Talk Spruce Pine went on to say, “There is no doubt that some of the current and past Town Council members, a few of them very good people, thought that this program was a good thing and most likely they thought it was serving to hopefully better our town. So please understand that not all the players in this unfolding mystery are bad guys. Likewise, no doubt the majority of the individuals and businesses that received these loans were legitimate and made as wise use of the money as they possibly could— this report and ongoing inquiry is in no way meant to reflect bad on any real operating business that received the funds legitimately. So, do not blame the recipients of the loans because they were just taking advantage of a really good deal.” They further added, “It is also important to note that the staff at the Spruce Pine Town Hall has been more than helpful and cooperative in producing what has been requested, at least in what they could find in what has been made available to them.”
