Agenda - Council - 02/08/2021 - Laserfiche WebLink

Home

CC Regular Session Meeting Date: 02/08/2021 Submitted For: Sean Sullivan, Community Development By: Sean Sullivan, Community Development Information 5.4. Title: Adopt Resolution #21-026 Approving Restaurant Assistance Plan: WAC (Water Availability Charge) Program and Approving Loan for Pleasant Valley Sunrise Group LLC dba (doing business as) Aurelio's Pizza Purpose/Background: Purpose / Background: The purpose of this case is to review the proposed the request for assistance and to consider extending or amending the current Restaurant Subsidy Program. Feedback from residents, businesses, visitors, and elected/appointed officials states that attracting more restaurants is a priority for Ramsey. On July 24, 2018 the City of Ramsey adopted a WAC (Water Availability Charge) Assistance program that is set to sunset on July 31, 2021. This Restaurant Subsidy Program is only for "new for -profit restaurants" but does have the ability to consider exceptions for existing businesses that are relocating or expanding. The city has received an application from Pleasant Valley Sunrise Group LLC dba Aurelio's Pizza for financial assistance relating to SAC (Sewer Availability Charge) and WAC Fees for an expansion. The Covid-19 Pandemic has been very hard on Ramsey restaurant businesses. The fact that we have an existing business willing to take the risk to expand its footprint during these times is unexpected. The proposed expansion would add a banquet space and more efficiency to its existing restaurant concept. The SAC Charge (from Metropolitan Council) is estimated to be $14,910 and the WAC Charge (from City of Ramsey) is estimated to be $8,190. These fees total $23,100. Pleasant Valley Sunrise Group LLC dba Aurelio's Pizza is requesting as much assistance as possible to help mitigate these fees. The EDA supports the application and consideration for financial assistance. Notification: N/A Observations/Alternatives: Observations: Project costs for this expansion are $75,000. The owner is applying $50,000 in SBA (Small Business Administration) Financing, private cash equity and a City of Ramsey SAC and WAC Loan. Staff supports approval of a 70%, 0% interest loan, forgivable loan for both the SAC an WAC Fees in the amount of $16,170; subject to satisfactory underwriting. The applicant would also be required to pay $6,930 (30%) for the SAC and WAC charges upfront and closing costs estimated to be $500-$750. The financing of this deal would include a loan agreement, and a subordinated UCC filing against collateral owned by the applicant. The applicant leases the space and a real estate mortgage would not be obtainable in this circumstance. Staff will work with the applicant to gather necessary financial information necessary to complete underwriting of the loan. The current Restaurant Subsidy Program would require an amendment or a City Council exception to allow for both the SAC and WAC forgivable loan. The program has been extended and/or modified multiple times in the past to address current economic conditions and City retail/restaurant goals. The current Restaurant Subsidy Program sunsets on 7/31/21. The EDA reviewed this item on January 14th and the draft minutes are attached for review.