0 Comments · Wednesday, August 14, 2013
The city of Cincinnati is suspending its relationship with SoMoLend, the local startup that the city partnered with in December to connect small businesses and startups with up to $400,000 in loans.
by German Lopez
Pension amendment to appear on ballot, city cuts ties with SoMoLend, heartbeat bill returns
A tea party-backed pension amendment yesterday cleared the hurdle of 7,443 petition signatures required to appear on the November ballot. Cincinnati
for Pension Reform, the group behind the amendment, had previously paid
nearly $70,000 to petitioners to gather signatures. The amendment
would privatize pension plans so the city and city employees hired after
January 2014 would contribute to individual retirement accounts that
the employee would then manage by independently selecting investments.
That’s a shift from the current system in which the city pools pension
funds and manages the investments through an independent board. But
unlike private-sector employees, city workers might not qualify for
Social Security, which means they’ll lack the safety net that typically
comes with risky 401k-style plans. If workers do qualify for Social
Security, the city would have to pay into the federal entitlement
program, which would cost the city more money, according to an Aug. 5
report from the city administration.
Cincinnati is cutting ties with SoMoLend,
the local startup that had previously partnered with the city to
connect small businesses and startups with $400,000 in loans. SoMoLend
has been accused of fraud by the Ohio Division of Securities, which says
the local company exaggerated its performance and financial figures
and lacked the proper licenses to operate as a peer-to-peer lending
business. The Division of Securities won’t issue a final order until
after a hearing in October. SoMoLend’s specialty is using crowdfunding
tactics to connect small businesses and startups with lenders.
Ohio Republicans are considering bringing back the “heartbeat bill,”
the controversial anti-abortion bill that would ban induced abortions
after a heartbeat is detected, which could happen as early as six weeks
into a pregnancy. The bill could be reintroduced next week. That would
come just a couple months after Republican legislators and Gov. John
Kasich approved a slew of anti-abortion measures through the two-year state budget.
The Ohio Senate will today hear testimony
from the Health Policy Institute of Ohio about projections that show
the state could save money if it takes up the Medicaid expansion. As
part of Obamacare, states are asked to expand their Medicaid programs to
include anyone at or below 138 percent of the federal poverty level. In
return, the federal government will pay for the expansion for the first
three years and wind down to paying 90 percent of the costs after that.
The Health Policy Institute previously estimated the expansion would
save Ohio roughly $1.8 billion and insure nearly half a million Ohioans in the
Councilwoman Laure Quinlivan is touting Cincinnati Safe Student Housing,
a website that allows university students to pick from housing options
that passed a free fire inspection. The website was unanimously approved
by City Council following several university students’ deaths to fires,
which council members argue could have been prevented with stronger
The new owner of the former Terrace Plaza Hotel says he will reopen the building as a hotel.
Alan Friedberg, managing principal of the company that bought the
building earlier this year, says the process of bringing back the
building will take a lot of time and work, considering it’s now been
vacant for three years.
Four Greater Cincinnati hospitals have been recognized for protecting the LGBT rights of patients and employees by the Human Rights Campaign Foundation: Bethesda North
Hospital, Good Samaritan Hospital, the Veterans Affairs Cincinnati
Medical Center and Cincinnati Children’s Hospital Medical Center.
Ohio Attorney General Mike DeWine rejected a ballot initiative that would have legalized marijuana in Ohio. DeWine claims the summary for the ballot initiative is untruthful and leaves out various important details.
Mason, a Cincinnati suburb, was ranked one of the top 10 places to live by CNNMoney. Maybe CNN really likes Kings Island.
Ohio Sen. Sherrod Brown was in Cincinnati yesterday to
call on the U.S. Department of Veterans Affairs to expedite processing
on benefit claims. The VA currently has a backlog of 500,000 veterans,
according to a press release from Brown’s office.
Introducing Elon Musk’s Hyperloop,
a proposal for a railway system that would use high-pressure tubes to
shoot passengers around the country. It’s estimated traveling from Los
Angeles to San Francisco, which normally takes about five and a half
hours, would only take 30 minutes in the tubes.
by German Lopez
CPS gets national attention, city might take Emery Theatre, SoMoLend accused of fraud
New York City mayoral candidates see Cincinnati Public Schools’ (CPS) community learning centers as a model for their city’s schools.
The centers bring members of the community, including dental clinics,
mental health therapists and mentors from local banks and churches, to a school hub to
keep students engaged after traditional classroom hours end. But an
analysis from The New York Times also finds that progress has
been fairly modest, with some schools in the district still struggling
and graduation and attendance rates showing little sign of improvement.
Still, CPS officials argue the initiative has helped mitigate the
effects of poverty and hunger in the classroom. CityBeat covered CPS and its community learning centers back in October here.
The city of Cincinnati could take control of the Emery Theatre
following a legal dispute between the Requiem Project, a nonprofit
seeking to renovate the theater, and the University of Cincinnati, Emery
Center Apartments Limited Partnership and the Emery Center Corporation,
the group of leasers and owners trying to push Requiem out of the
building. Requiem stated in a letter Friday that it would approve of the
city taking over the building, a possibility currently being analyzed
by Cincinnati’s legal team. CityBeat first covered the Emery Theater situation in further detail here.
SoMoLend, the local startup and city partner that connects small businesses seeking loans and lenders, is being accused of fraud by the state of Ohio.
The charges could force the high-profile business to shut down; for the
time being, it’s not giving out any loans in the state. In December,
the city of Cincinnati teamed up with SoMoLend in a partnership that was meant to land local small businesses and startups much-needed loans through crowdfunding.
Ohio will spend $6.2 million this fiscal year to combat gambling addictions.
With casinos, racinos and gambling generally expanding in Ohio, the state government is directing more
money to county mental health and addiction boards to ensure problem
gamblers are treated.
The two officers who were on the clock when death row inmate Billy Slagle hung himself have been put on paid administrative leave
while the Ohio prisons department investigates what happened. Slagle
was convicted of murder and sentenced to death — a punishment the Ohio Parole Board and Gov. John Kasich upheld in July despite pleas from a county prosecutor — but he hung himself days
before he was supposed to be executed. CityBeat covered Slagle’s case in further detail here.
Attorney General Mike DeWine is asking Ohioans to be cautious of unsolicited phone calls offering medical alert devices.
Cincinnati’s Horseshoe Casino accidentally awarded two $1 million prizes
on Saturday night. It turns out the casino gave a $1 million check to
the wrong Kevin Lewis, so it decided to keep course with the original
check and give another $1 million to the Lewis the check was
originally intended for.
Cursive might get kicked from the classroom.
U.S. Attorney General Eric Holder is directing federal prosecutors to minimize the use of mandatory minimum drug sentences.
The change will mostly benefit drug offenders with no ties to
large-scale organizations, gangs or cartels and no history of violence.
Ohio gas prices dropped this week and remain below the national average.
Actual headline: “Video shows thief stealing cigarettes.”
Check out Kings Island’s new roller coaster: Banshee.
Sanjay Gupta, neurosurgeon and CNN’s medical respondent, is now down with marijuana.
by German Lopez
Posted In: News
at 09:55 AM | Permalink
Local startup accused of fraud by state
The city of Cincinnati is suspending its relationship with SoMoLend, the local startup that the city partnered with in December to connect small businesses and startups to $400,000 in loans.
The broken partnership comes in response to
accusations of fraud from the Ohio Division of Securities that have
forced SoMoLend to stop giving out loans in the state and could
lead to the business’s shutdown.
City spokesperson Meg Olberding told CityBeat in an
email that although the city partnered with SoMoLend in December, it
has yet to give out any loans through the crowdfunding incubator.
The Ohio Division of Securities says SoMoLend failed to
gather the proper federal and state licenses for a peer-to-peer lending
business and falsely inflated its performance and financing figures.
SoMoLend gained local and national recognition for
supposedly helping foster startup and small businesses by linking them
to loans through crowdfunding — a particularly promising proposition
given the state of the economy and research from the National Bureau of Economic Research that shows startups are the best drivers for economic and job growth.
But with the extent of the charges, it’s questionable whether SoMoLend had any success to begin with.
Candace Klein, CEO of SoMoLend, told The Cincinnati Enquirer
on Sunday that the company is currently in talks
with the state. She stressed that the Ohio Division of Securities won’t
issue a final order against SoMoLend until after a hearing scheduled for
SoMoLend, which stands for Social Mobile Local Lending,
was founded in 2011. The business’s specialty is using crowdfunding
tactics to connect small businesses and startups with lenders. It then
packages the loans to sell them as notes and charges a fee or commission
for its services.
by German Lopez
Cincinnati to work with SoMoLend in lending plan
The city of Cincinnati will be pairing up with a web-based
lending platform to help out small businesses and startups. With the approval of the
Small Business Advisory Committee, the city and SoMoLend will give up
to $400,000 in loans to stimulate economic
growth and job creation.
The partnership will aid small businesses and startups
through crowd funding, which connects multiple potential lenders so no
single investor, including the city government, is carrying the a bulk
of the burden. Since crowd funding gets more investors involved, it can
also raise more money for promising startups and small businesses.
Businesses will be picked through SoMoLend’s typical
application process, which emphasizes startups and small businesses.
Successful applicants usually have 15 or fewer employees, meet a few
standards regarding business and personal finances and prove they
actually need a commercial loan. In the past, businesses have raised as
much as $1 million in loans with SoMoLend.
Applicants will also have to go through the city’s
application process. The city government will look at how many jobs are
created, what’s the capital investment involved, how much the city will
give relative to private lenders and other similar metrics.
Even as the economy recovers, small businesses and
startups are having a tough time getting loans in comparison to bigger businesses. So the focus on small
businesses and startups is in part to bring beneficial fairness to the
system, says Meg Olberding, city spokesperson. “Access to capital at all
levels has to happen. And the city government feels like small
businesses are key to growth in our local economy.”
The partnership’s focus on startups is economically sound. Governments and politicians love to herald small businesses as the drivers of economic
growth, but studies suggest startups are more deserving of the praise. A paper from the National Bureau of Economic Research found that young small businesses, or startups, are the key drivers to economic and job growth.
As for why SoMoLend was picked over other platforms,
Olberding says location and history played a role: “It’s a local small
business, so it’s … demonstrating what we’re talking about. It’s also a
demonstrated success in terms of bringing viable businesses to the
The partnership is part of an ongoing effort to spur small
businesses and startups in Cincinnati. SBAC was created in 2012 to pave
a clearer, better path that encourages such businesses in the city.
SBAC reviewed, gave feedback and approved the new partnership earlier
today.Councilwoman Yvette Simpson, head of SBAC, praised the
partnership in a statement: “I am excited that the SBAC approved the city’s new partnership with SoMoLend today. By making city lending more
efficient and expanding the network of small businesses receiving city
assistance, this new partnership fits well into the SBAC’s goal of
making Cincinnati a better place for small business.”