Records Raise More Questions About Old Town Shoe Startup

Made in Old Town, the athletic shoe startup backed by a risky loan from Prosper Portland, continues to face questions about fiscal prudence.

As WW previously reported, the Prosper board approved a $7 million loan in February to the project’s leaders to buy two buildings in Old Town. At the time, MiOT planned to purchase the two buildings for $7.4 million, though an appraiser had valued them at $3.8 million.

Records newly reviewed by WW from that time show that a Prosper investment manager working on the loan briefly questioned why MiOT would pay that asking price. One of the startup’s principals, Jonathan Cohen, wrote to the Prosper manager in early February that the appraiser was probably wrong—and that to renegotiate the price with the seller could kill the deal altogether.

So Cohen wrote that the project planned not to bring up the appraised value with the seller in an effort to lower the price: “If we come in, right at the deadline, with a low-ball offer ($1MM less?), it would be regarded as bad faith, I believe, and I can see the seller trying to find a reason to exit the deal, and walk away with all of our earnest money and lease payments...That would be a disaster.” Should the deal be scrapped, he added, “we will have wasted the state’s initial grant.” (The Oregon Legislature awarded MiOT a$2 million grant in 2024.)

MiOT ended up buying the building for $6.9 million, almost entirely with taxpayer dollars. Fast forward almost a year and, according to Prosper’s loan terms, MiOT is in material default because it’s failed to raise $5.7 million in financing it promised to get from private sources.

Still, both parties defend the loan. An MiOT spokesperson declined to answer WW’s questions, saying instead: “We look forward to sharing more information in the new year.”