When William Smith needed money to buy and renovate the property for his ambitious cigar bar development, he approached Invest Detroit, a prominent local lender with long-standing ties.
Why it matters: Invest Detroit approved two loans last year totaling $3 million for Smith's project, as first reported by Axios Detroit .
- Those loans and Smith's other real estate interests are under scrutiny since bombshell allegations arose last month that he stole nearly $40 million over 11 years while he was CFO of the Detroit Riverfront Conservancy.
- Invest Detroit is weighing its options since Smith was charged and the property remains undeveloped.
What they're saying: "Invest Detroit is currently working with legal counsel to identify next steps, which could include foreclosure and additional remedies," president and CEO Dave Blaskiewicz said in a statement Monday about the loans for Smith's project.
- Invest Detroit disbursed one of the two loans — $600,000 for the building purchase and predevelopment costs at 1977 E. Woodbridge, a vacant property near the east riverfront.
- Blaskiewicz said the second loan of $2.4 million for construction costs was not disbursed because work never began.
1977 E. Woodbridge. Photo: Joe Guillen/Axios
What we're watching: Detroit's Economic Development Corporation (EDC), the public body that sold the Woodbridge property to Smith's development group last year, "retains certain rights," including a right to repurchase the property, if it's not developed as anticipated, Lanard Ingram, a spokesperson for the EDC, tells Axios Detroit.
- "The EDC will continue to monitor the situation, including any impacts of a potential foreclosure by Invest Detroit," Ingram says.
Context: The Riverfront Conservancy, where Smith worked, and Invest Detroit are linked through shared leadership.
- In addition to his job at Invest Detroit, Blaskiewicz sits on the conservancy's board.
- Matt Cullen, chairman of Cleveland-based JACK Entertainment and former Bedrock Detroit CEO, is chairman of both the Conservancy and Invest Detroit.
Zoom in: Smith was a volunteer member of the Invest Detroit Advisory Committee beginning in June 2015. He was removed from the committee this year, per an Invest Detroit spokesperson.
State of play: Blaskiewicz defended Invest Detroit's approval of loans to Smith in Monday's statement. The process involved several layers of staff approvals, full underwriting, a third-party criminal background check and more.
- "After careful review of Will Smith's roles at both the Riverfront Conservancy and Invest Detroit, it was determined that no conflict of interest was present," Blaskiewicz said.
The latest: A federal judge today extended a freeze on Smith's assets until Aug. 29, the Detroit News reports .
- The judge allowed Smith to access $3,421 per month for living expenses.
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