Editor’s note: This is an expanded version of a story published Nov. 13 to include information from newly-released public records.
Eastern Oregon University has shuttered a business center that was falling far short of creating new companies and jobs in rural Oregon while under the direction of a Republican state legislator from Heppner.
The Small Business Development Center in LaGrande until recently was managed by Greg Smith, a self-described business expert who juggles multiple jobs.
Officials said the work of coaching entrepreneurs, providing public trainings and helping arrange business financing is being shifted to similar business centers at Treasure Valley Community College in Ontario and Blue Mountain Community College in Pendleton.
Tom Vialpando, director of the Ontario center, said last week, he had no information about the change. The director in Pendleton, Eric DeLary, didn’t respond to a telephone message.
The closure, which came without any public announcement by the university, follows a months-long investigation by the Enterprise into Smith’s operation of the center. His company was under contract at $138,936 a year to do so. EOU officials terminated that contract as of Oct. 15 in a decision “not made lightly,” they told Smith.
Smith’s contract was only part of the cost to EOU. The university provided office space and utilities for Smith at no charge. And in recent months, the business center was run mostly by student interns paid by the university.
The center closed Oct. 31, its website removed and its phone disconnected, university officials confirmed.
Smith’s team had been reporting the center was far from reaching goals for people served, jobs created and business financing placed.
Records the university was ordered to release to the Enterprise showed the last full year of operations resulted in five new jobs. The goal had been 48.
The business center had a goal of serving 243 business clients. It served 69, the records showed.
Performance sagged in recent months. The SBDC had a goal of serving 41 clients long-term in the 12-month period that started July 1. The university data showed that so far it had served none.
Smith didn’t respond to questions about the data.
But university officials praised Smith’s work even as they ushered him out the door.
“The training, resources, and personalized guidance provided to aspiring entrepreneurs and established business owners alike have been of the highest quality,” according to a letter to Smith on Aug. 15.
Officials in charge of the program provided little explanation for ending Smith’s operation, in place for 20 years. Records show that EOU’s communications manager, Justin Montgomery, was instructed to “not distribute” the letter, and a public relations consultant to university officials said of Smith’s departure: “I don’t think this is announcement worthy.”
Montgomery did later respond to emailed questions about the closure.
“The region’s service map is inefficient in delivering resources, and discussions indicated the need for revision to better serve small businesses,” according to an email from him on Tuesday, Nov. 12.
Montgomery said university officials and the state office that oversees the business centers “decided it would be best to look at a regional model” for business help, using the Ontario and Pendleton community colleges.
The university initially planned to move the development center more directly under its control and began recruiting for a new director. The process drew few candidates, according to university records.
Just days after Smith was notified his contract was ended, he began forwarding development business matters to EOU even though he was still obligated to provide two more months of service.
In a Sept. 13 email, Smith sent to a university official an inquiry from an entrepreneur seeking help with a loan.
“I will begin sending entrepreneurs your way for service,” he said.
He sent the note to Scott McConnell, dean of the Business College who supervised the business center. McConnell pushed back four days later.
“Thank you for keeping me in the loop on these responses but since the contract will not be finished until October 14, you may continue to handle some of these responses,” he wrote to Smith in an email.
University officials for months have resisted or ignored inquiries from the Enterprise regarding the business center and Smith’s performance. Last month, Union County District Attorney Kelsie McDaniel issued five separate orders to the university to turn over public records it was withholding from the newspaper.
McConnell and EOU President Kelly Ryan have declined interview requests and didn’t respond to written questions.
Mark Gregory, director of the Oregon Small Business Development Center Network, more two weeks ago said he would answer written questions but hasn’t. He didn’t respond to additional questions submitted to him last week.
Instead on Wednesday, Nov. 11, he issued a two-paragraph press release. His office was “exploring a new regional service delivery model” that he said would “allow for more robust, regionwide assistance tailored to the needs of the small business community.”
Gregory provided no details on how that model would work, when it would be in place, and what small businesses in northeast Oregon should do in the meantime.
The university in October pressed Smith to turn over public records he held concerning the development center.
“I want to underscore how important it is to the university that steps are taken to ensure full compliance with the Oregon Public Records Law,” according to an Oct. 2 letter from the university’s in-house attorney, Chris Burford, to Smith. He said Smith’s company had a “contractual obligation” to turn over the records. The company also had a duty to provide the documents “under Oregon statutory law (including criminal law),” the letter said.
University officials didn’t respond to questions about whether all such records had been produced.
The business center is one of 20 that operate out of community colleges and universities around Oregon. They are jointly funded by the U.S. Small Business Administration, Business Oregon and the host school.
The collapse of the LaGrande center is the latest debacle in government programs managed by Smith.
For years, he served under contract as Malheur County’s economic development director. He quit that role in 2022 over questions about his performance and then walked away from managing the Treasure Valley Reload Center. That project subsequently was brought to a halt by state officials because of excessive spending and an uncertain business plan.
Smith also serves as full-time executive director of the Columbia Development Authority in Boardman. The authority is in charge of turning a former Army military base into industrial base for local employment.
His service there recently has been questioned, and the board he reports to in September stripped him of a $66,000 increase to his $129,000 salary. The board members moving for the reduction said Smith misled the board earlier to get the raise.
PREVIOUS COVERAGE:
Eastern Oregon University ends Greg Smith contract, mum about the circumstances
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