Menino offers loan to keep Banner afloat

The mayor told the Globe that the loan will come from the Boston Local Development Corp. fund, a private nonprofit administered by the Boston Redevelopment Authority that provides financial infusions to struggling small businesses. Menino said the Banner would work with Ron Walker, founder and president of Roxbury merchant bank Next Street Financial LLC, to develop a ‘‘positive business plan.’’

The mayor said the loan is not an attempt to garner favor from the Banner, which focuses on the black community and has often covered Menino critically.

‘‘This is about me helping a business that is very important to the minority community,’’ Menino said. ‘‘I will step up anytime and help any business in this city. I’m trying to help a business survive. Tell me if that’s wrong.’’

The free weekly published what it said was its final edition July 9, and had planned to close by the end of the month because of a revenue slump caused by the recession.

Mel Miller, the Banner’s publisher, who had hoped for investors to step up and save the paper, did not respond to calls yesterday seeking comment. Howard Manly, the paper’s executive editor, would not comment on the loan, but he did express gratitude for the community support.

‘‘The level of support for the Banner has been overwhelming,’’ he said. ‘‘From the highest levels of the city of Boston to the blue-collar workers, the support for the Banner had been extremely heartfelt.’’

Larry Mayes, a senior adviser to Menino, said that the mayor was approached by ‘‘representatives of the Banner’s interests’’ yesterday and that he met with them in his office and discussed ways the paper can get back on its feet.

‘‘The mayor did this because the Banner’s been around 44 years,’’ Mayes said. ‘‘It is a jewel. He felt that it was too important to lose.’’

Lou Ureneck, chairman of the journalism department at Boston University, said last night that even European countries, particularly France, have been offering subsidies to media outlets to help them survive. Still, he said that the loan to the Banner could be an unprecedented arrangement between a government agency and a US media outlet — and could raise some ethical concerns.

‘‘Clearly, the Banner is a community asset, and it’s in the interest of all residents of Boston for the paper to keep operating,’’ he said. ‘‘But it is highly unusual for a government entity to loan money to a newspaper.’’

Samuel Tyler, of the watchdog Boston Municipal Research Bureau, also questioned the loan at a time when the city is cutting staff and funding for programs.

‘‘I think the Banner plays an important role in Boston and the Boston community, but I don’t think it’s an appropriate use of public funds,’’ he said. ‘‘I just think the city needs to hunker down for the next couple of years.

It can’t solve every small business problem, and if there’s a real market for the service of the Banner, the better option is to look to other sources to support that over next couple of years.’’

Governments and media companies are looking for new ways to help the struggling newspaper industry, which is suffering as readers migrate to the Web and advertising declines. Recently, US Senator John F. Kerry held hearings in Washington about the status of the newspaper industry. And in Washington state, where the Seattle-Post Intelligencer closed in the last year, officials voted to give newspaper publishers a 40 percent tax break — a law that went into effect this month.

The Banner was formed in 1965, and over the years grew to a circulation of 30,000 copies. It chronicled the biggest stories in Boston’s black community, among them the school busing crisis in the 1970s and, in the 1990s, the successes of local pastors’ work with police to reduce crime. The newspaper also gained a reputation for challenging city officials, including Menino, on issues such as development in the city’s poorer neighborhoods.

Small publications like the Banner have been particularly vulnerable recently because of their niche audiences, smaller advertising pool, and lack of financial reserves. Indeed, the Banner had become notably thinner. The first edition this month had 19 pages, compared with 30 pages the year before.

Dot Joyce, the mayor’s spokeswoman, said details and timing of the loan to the Banner have not been finalized.

‘‘Everybody understands this industry is changing,’’ Joyce said, ‘‘and the Banner has a chance to be on the forefront of what that new change could be. The mayor is continuing to work with them to ensure there is a voice in that community and that the community continues to be empowered.’’ City officials, community activists, and ordinary citizens have mobilized since news of the Banner’s demise surfaced last week. News of the loan comes one day after the Globe reported that Harvard University law professor Charles J. Ogletree said he had lined up a group of 12 investors who said they could provide enough money to get the weekly back on the stands as early as next week.

Ogletree did not respond to questions about his effort.

Adrian Walker of the Globe staff contributed to this report.