ECONOMIC DEVELOPMENT AUTHORITY - Erik Thorvig, Community Development Director
Title
APPROVAL OF DEMOLITION LOAN AGREEMENT FOR FRESH PICKED PIZZA
Background
In July 2019, Fresh Picked Pizza received approvals for construction of a new restaurant at 8683 Central Avenue NE. The owner of the restaurant is proposing to construct a new 5,000 sf. restaurant with take-out, dine-in and patio seating. The property currently has a dilapidated former nursery building which will be removed for the new restaurant. Many other significant aesthetic improvements will occur on the site. The property is part of a larger redevelopment area identified in the 2040 Comprehensive Plan.
The restaurant owner is also requesting a $72,500 grant to assist in the overall $145,000 demolition costs. It’s not uncommon for a developer to ask for assistance with demolition costs under a redevelopment scenario. Demolition is an additional significant expense for developers who buy a redevelopment site. Redevelopment of blighted sites is a benefit to the city, so the EDA has provided demolition assistance in a variety of ways including grant and loan. Assisting a developer in demolition is often a less expensive for the EDA than the EDA purchasing a blighted property.
This topic was discussed at recent workshop and there was support to provide to provide assistance to the business owner. In 2019 the EDA allocated $250,000 to a small business loan program. This program was established for projects like this and provides the EDA flexibility on terms and rates to assist small businesses.
Staff is proposing a loan based on the following terms:
• Amount - $72,500
• 10-year term
• Defer first payment for two years
• 0% interest for the first three years
• Prime rate (of when the loan was approved) after third year
Recommendation
Approve the attached Resolution.
Body
WHEREAS, the property at 8683 Central Avenue NE was purchased by the owner of Fresh Picked Pizza; and
WHEREAS, the property has a vacant, dilapidated building and is located within an identified redevelopment area in the 2040 Comprehensive Plan; and
WHEREAS, approvals were received in July 2019 for the construction of a new 5,000 sf. restaurant; and
WHEREAS, the EDA recognizes that there are certain costs associated with redevelopment of the site wherein EDA assistance would facilitate redevelopment at this time;
NOW, THEREFORE, BE IT RESOLVED, that the Blaine Economic Development Authority hereby approves entering into a loan agreement for the demolition assistance based on the following terms and directs the president and executive director to execute the necessary documents.
• Amount - $72,500
• 10-year term
• Defer first payment for two years
• 0% interest for the first three years
• Prime rate (of when the loan was approved) after third year
PASSED BY THE Blaine Economic Development Authority this 4th day of May, 2020.