July 23, 2014

Elyria
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Elyria Council OKs facelift loans to downtown businesses

ELYRIA — City officials are putting not just their support but also their money behind the success of downtown businesses with the creation of a revolving loan fund that can be used for building repairs.

About five months ago, Mayor Holly Brinda first suggested a portion of Community Development Block Grant funds be used to start the loan fund geared toward existing downtown businesses and those seeking to move into the struggling area.

On Monday, Council members — from both the Community Development and Finance committees — took a step toward finalizing the guidelines of the program.

Council members are not completely behind the idea of loaning money for building projects, but they are warming to the concept in the hopes of re-energizing the downtown business district.

“We’ve tried to do this many times in previous years, but we have not had much luck,” said Councilman Jack Baird, R-at large. “But I’m going to try to be optimistic this time because we need all the help we can get.”

With the recent exodus or planned departure of many longtime businesses from Broad Street — Loomis Camera, Moss’ Restaurant and Action Wear, to name a few — city officials are happy to appear business-friendly to the remaining establishments in the area.

Brinda said there are a number of businesses already interested in the program, which will loan between $2,500 and $10,000 to business owners to be used to upgrade building facades or repair lingering building code violations. The fund will have a total of $50,000. However, each borrower will have to meet stringent credit and eligibility guidelines to qualify.

“I think it’s going to be very helpful to a lot of business owners,” she said.

Still, one main concern of Council members continues to be the recovery rate and possibility of loan defaults on the part of the borrowers.

Brinda said the loans must be backed with collateral, and the borrowers need to have a relationship with a local bank that can provide access to credit examination tools.

“We are comfortable we have enough safeguards in place that we will be making good loans, not bad loans,” she said. “We are not in the business of making bad loans.”

Councilman Garry Gibbs, R-3rd Ward, is concerned that the loans do not come with a stipulation requiring job creation.

“Without an employee and minimum employment piece, we are not going to create the kind of economic flow we want in the downtown area,” he said.

However, Brinda said many of the businesses are not looking to expand their workforce even though they are interested in cosmetic changes.

In the end, both committees voted in favor of recommending the loan fund be established.

“This is an investment for our downtown and also sets the tone for new businesses that we are welcoming,” said Tom Callahan, D-at large.

Council will vote on the matter at the next full Council meeting.

In other news

A Grafton man’s attempt to convince City Council to give him $500 after he filed a moral claim saying the city is responsible for thousands of dollars in water damage to a Middle Avenue property he owns was denied.

The damage happened more than five years ago. Yet property owner Gary Hales brought his case to the Finance Committee on Monday in a last-ditch effort at recouping some of his losses. A legal claim for monetary compensation had been denied by the city law director, but a moral claim to Council allows residents to appeal to city representatives on a more personal level.

“At some point, the owner of the building has the responsibility to check their winterizing efforts, and secondly, the owner has to check to make sure the water is turned off to the radiators as a part of the winterization process,” said Law Director Scott Serazin in explaining the denial. “And, this was so long ago we have no way of definitively determining who was at fault. He just sat on it too long.”

Hales and his brother, Richard, were the third generation owners of Hales Food Market on Eighth Street and Middle Avenue. Because of declining safety in the neighborhood, Hales said the store closed in 2005 and the building was subsequently rented to a now-defunct organization.

After the organization left the building, Hales said he shuttered the building and did what he thought was a good winterization of the building. However, sometime in January 2008, the water to the building was turned on and off.

Hales and city officials differ on who requested the water to be turned on, and at whose request was the water shut off.

But it is estimated that it flowed for 10 days through the building’s radiators. After it was finally turned off, Hales said he went back to the building only to discover the building’s heating system was damaged and all of the radiators were busted.

Hales said the damage is more than $5,000.

“The building is just empty, and I don’t even try to collect any kind of rent on it in that condition,” he said.

Council members said the time lapse made it nearly impossible for them to grant the request for compensation.

“We can’t just hand you $500 when it’s been so long and we don’t have all the facts,” said Council President Mike Lotko, D-at large.

Contact Lisa Roberson at 329-7121 or lroberson@chroniclet.com.