Requirements ‘not worth it’ for prospective property owners
The Hollister Redevelopment Agency has decided to drop an idea
to lend funds for commercial kitchens to property owners within the
district due to unappealing requirements for the business owners
with the law.
RDA officials about a year ago broached the idea in a study
session with council members. The intention was to use community
development block grant funds to lend interested owners the money
needed to install commercial kitchens.
Requirements ‘not worth it’ for prospective property owners
The Hollister Redevelopment Agency has decided to drop an idea to lend funds for commercial kitchens to property owners within the district due to unappealing requirements for the business owners with the law.
RDA officials about a year ago broached the idea in a study session with council members. The intention was to use community development block grant funds to lend interested owners the money needed to install commercial kitchens.
Officials had hoped it might help spur economic activity in a downtown area city leaders believe can support more eateries, said William Avera, director of development services. Avera referenced a marketing report conducted by the city that determined the downtown economy could support six to eight more small- to mid-sized restaurants.
But after discussing the potential program with prospective participants in the business community, city officials decided against pursuing the grant funds and proceeding with the program. Avera noted “state underwriting criteria” as a big obstacle.
Property owners would have been forced to secure the loans using their properties, said Bill Chow, the RDA director.
“Business owners didn’t want to have to do that,” Chow said. “They weren’t being enticed even though the funds were there.”
About $800,000 in CDBG funds actually have been available for a couple of years, Chow noted. Still, the federal restrictions outweighed the benefit – at least that’s how prospective users felt, RDA officials said.
The idea was to lend the necessary money using federal funds. Avera pointed out that the RDA likely would have “probably tried to do a deferred loan type of deal” that would have been forgiven if the properties were not sold within a specified time frame, similar to the facade loan program.
“We did talk to some of the potential business owners we thought would be interested in the program,” Chow said. “But after listening to what the requirements are, they decided it was just not worth it.”
