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Business Academy Revived With New Name, More Funds : Development: City Council takes greater control after revelations of extensive funding without safeguards. A new advisory board is named.

February 18, 1993|TINA GRIEGO | TIMES STAFF WRITER

LYNWOOD — Scrambling to save a city-funded business development program from collapse, the City Council moved this week to take greater control of it.

Declaring a fresh start, city officials announced that the Entrepreneurial Development Academy of California, which is run by a Compton-based nonprofit organization, is being replaced by the Lynwood Entrepreneurial Development Academy, which will be controlled by the city.

Although contracts have not been written and a new business plan is still being developed, City Council members said the purpose of Lynwood Entrepreneurial Development Academy will be the same as the Entrepreneurial Development Academy of California--to train Lynwood residents to run their own businesses.

Despite objections from several residents, the council voted to allocate $225,000 in federal funds for the academy and appointed a new nine-member advisory board of local residents, educators and other professionals.

The changes were prompted by recent revelations that city officials allocated a $500,000 grant and a $1.5-million loan with virtually no safeguards to protect the city's investment. City officials failed to draw up standard contracts or loan agreements despite several warnings from the city attorney.

Since then, the city has taken several steps to create greater accountability including the authorization of an audit and the appointment of a new five-member board of directors, chaired by Leighton Hall, a businessman and former Lynwood Chamber of Commerce president.

At the original academy, about 30 entrepreneurs are receiving free instruction in marketing, developing a business plan and other courses. When they finish classes later this month, some will move to the academy warehouse where they will receive free office space and clerical support until their businesses are established. In return, graduates of the academy agree to locate their businesses in Lynwood and hire its residents.

City Council members said that the changes, including the use of federal funds, will create a much-needed system of checks and balances and will give the city more say on how the program is run and how public funds are being spent.

Councilman Armando Rea and several residents remained unconvinced, however. Rea, an outspoken critic of the academy, said he thought it would be inappropriate to give any more money to the academy until the audit was complete. Saying he refused to discuss the matter until then, the councilman walked off the council dais and disappeared into a meeting room until after the vote was taken. His four colleagues voted for the funding.

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