Loan lands restaurant
HOUGHTON — The Houghton City Council approved a $98,000 loan from its revolving loan fund (RLF) Wednesday for a new restaurant to be located in the former Urban Rustics building on Shelden Avenue.
Paul Gemignani, who also owns Gemignani’s Italian Restaurant in Hancock, plans to open a higher-end casual restaurant employing up to 30 people, according to information provided by City Manager Eric Waara.
The cuisine was not specified but would be “unlike anything in town now,” according to the material.
At Wednesday’s meeting, Gemignani said there is no time set for an opening.
“Sooner rather than later,” he said.
Gemignani has also entered into a purchase agreement for the building at 501 Memorial Drive most recently used by Hardee’s.
The fund has $271,000 in unrestricted cash available. Five loans are active, having budgeted repayments of $33,000 per year.
The $255,000 opening costs for the restaurant are also being met by a bank loan of $135,000, $115,000 of which is backed by the Small Business Association.
The RLF loan is contingent on approval from Range Loan. The RLF loans will only be drawn down after the Range Loan has been drawn down in full and will require documentation of expenses acceptable to the city.
Any withdrawal of funds must occur within six months after the initial draw. Repayment starts either one month after the final draw or seven months after the initial draw.
As collateral, the city will have the second position on the mortgage at the restaurant on 127 Quincy Street in Hancock, which has an estimated value of $120,000.