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EVANSVILLE Sometime this year, the

Growth Alliance for Greater Evansville plans to repay a loan made by the city last year.

In July, GAGE borrowed $280,000 from the Evansville Department of Metropolitan Development. The money was needed, officials then said, to pay partly for repairs to the building GAGE occupies at 318 Main St. after its roof sprung a leak.

The loan was to come due in November, but GAGE officials obtained an extension until May. Dan Bugher, chairman of the GAGE board, said Friday that still may not be enough time.

“But it’s our expectation to pay that in 2010,” he said.

Bugher said the organization has had trouble coming up with the needed cash because of a series of events coupled with a mistake that made it impossible to collect money the organization had used in the past for work on the GAGE building.

First came the ice storm that struck in January 2009 and weakened the building’s roof. Heavy rains later caused a leak. The subsequent repairs cost more than $100,000.

About the same time, GAGE was getting the fourth floor of the building ready for occupancy by the Chamber of Commerce of Southwest Indiana and the Economic Development Coalition of Southwest Indiana, both of which had moved out of the Old Post Office. The work cost about $400,000.

All of that came before the 2009 Freedom Festival, a sprawling event organized by GAGE. Official accounts later put the festival’s loss at $290,000, but Bugher said that was the amount attributable only to direct spending on goods and services. Once the money paid to employees is accounted for, the figure exceeds $300,000, he said.

Then came the mistake. Bugher said the loan served as a substitute for money that was supposed to come from a Certified Technology Park fund overseen by the Department of Metropolitan Development, which owns the GAGE building. With the approval of state government, a city can use a Certified Technology Park to collect income and sales taxes paid within a certain area and set that money aside for projects in the same area.

At one time, Evansville’s Certified Technology fund contained $5 million, the most the state will let a single park collect. Much of that money paid for renovating the GAGE building, technically called Innovation Pointe.

The final stage of the work was to be to the fourth floor. Bugher said those projects were eventually to be paid for by using what was left in the Certified Technology Park fund, which now contains $365,811.88.

But Joe Wallace, the former president and chief executive officer of GAGE, failed to properly fill out the paperwork needed to secure those resources, Bugher said.

Specifically, Wallace did not put the construction out to bid in the way required for the use of public money, Bugher said. When Wallace later tried to get the Certified Technology Park to reimburse GAGE for work already done to the fourth floor of Innovation Pointe, his request had to be refused, Bugher said.

Wallace had a different account of the matter. He said officials in the city told him that GAGE would receive no more money from the Technology Park. Knowing that, he didn’t bother following the usual procedures, he said.

“I would have done the paperwork,” he said. “I probably did the same paperwork 10 different times on 10 different projects.”

No matter the reasons for the loan, Wallace said the timing was unfortunate. Coming in July, the borrowed money appeared to many people as meant solely to cover the loss from the Freedom Festival.

Wallace said it was nothing but coincidence that the loss and loan amounts were so close, although he can understand why the figures gave rise to suspicions.

Disputing another common notion, Wallace said the loan amount has nothing to do with the money GAGE pays Tom Barnett, the director of the Department of Metropolitan Development, through a private contract. Barnett’s pay from the city is supplemented with a $42,643 annual contribution from GAGE.

The source behind the contract is the Evansville Bond Bank, which manages $15 million in lease payments made by Casino Aztar in 2006. The money is to go to helping local businesses and working toward the general prosperity of the city.

Bugher agreed that no loan money ever went to Barnett.

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