PUEBLO, COLO. - Pueblo Mayor Nick Gradisar fell under scrutiny this week, after signing off on thousands of dollars in COVID-19 relief funds for two businesses that held potential conflicts of interest.
The City of Pueblo gave a $10,000 grant to TickTock, a coffee shop in downtown Pueblo, owned by Emily Gradisar, the mayor's niece.
The city also awarded a $4,000 grant to Stiletto Hair Salon on Pueblo's south side. Stiletto pays rent to Wildwood Professional Building - of which Nick Gradisar is a partial owner.
More than $3 million in COVID-19 Emergency Grants and Loans have been distributed to hundreds of Pueblo Businesses. That's out of $5 million total, with the proceeds coming from Pueblo's 1/2 cent sales tax for economic development.
"We had to be very liberal with this money cause it was needed desperately," says Pueblo City Council President Dennis Flores, "Businesses were on the verge of closing their doors."
Flores has been looking into these ethical concerns for nearly a week after a taxpayer filed a complaint with Pueblo City Council. In a letter to the individual that brought this matter to his attention, Flores said the ethics complaint against the Mayor is dismissed for "failure to state a claim".
The City Council President says the process for dishing out aid is "squeaky clean", and the Mayor had little to do with business applications for the COVID-19 funding.
"This did not rise to the level of an ethics problem," said Flores. "The mayor did not make the decisions. The Evaluation Committee made the decision."
Mayor Gradisar appointed three Pueblo businessmen and women to vet and review each business application for COVID-19 relief. Flores says they interviewed each applicant before recommending them to the mayor.
Ultimately, Gradisar's signature was required before any business could be approved a loan or grant.
"That's to make sure the people were utilizing the money correctly," Flores said. "That money is for salvaging their businesses."
Flores says he does not know if the mayor individually reviewed each applicant before signing. However, the city council President says the three-person committee was unaware of the relationship between the mayor and his niece when they reviewed her application. The mayor never discussed it with them.
Contracts between the City of Pueblo and both Stiletto's Hair Salon and TickTock obtained by KRDO through a CORA request clearly show the mayor's signature on both documents.
According to the City of Pueblo, Gradisar owns a 25% stake in Wildwood, which collects rent from Stilettos. In the COVID-19 relief aid contract between the city and Stilettos, rent is listed first under eligible expenses.
Flores doesn't see a problem with this.
"Wildwood never asked for any money. I think that's important," said Flores. "Mayor Gradisar did not know that there was an application for Stilettos. The mayor did not go back to the committee and say 'I want you to give this lady money so she can pay her lease payment back.' That is not the way the process worked. The committee [was] trying to save this business."
Pueblo Mayor Nick Gradisar says he appreciates the comprehensive review from Flores.
“As the report states, the Evaluation Committee, my office and staff did everything correctly to make sure applications were awarded on merit,” Gradisar said. “I’m proud the city took immediate action to help businesses when they needed it the most.”
Emily Gradisar, the owner of TickTock, tells KRDO she asked city employees if there would be a conflict of interest if she applied for COVID-19 Relief Funds since her uncle is the mayor. She was told no, because the mayor did not make the decision but the committee did. Her uncle was only supposed to 'sign the checks' at the end.
Stiletto's Hair Salon's owner Danielle Deherrera tells KRDO she never considered a conflict of interest. Deherrera says she has never even spoken to the mayor.
Both businesses say that without the relief funds, their businesses would be in deep trouble.