Garrett Neese/Daily Mining Gazette Julien Properties will receive a $148,000 loan for interior improvements to the Rhythm building to create new tenant spaces. The Houghton City Council approved the revolving loan fund expenditure Wednesday.

HOUGHTON — The Houghton City Council approved a revolving loan fund request to reconfigure the Rhythm building to create additional spaces inside.

Julien Properties will receive the $148,000 loan for interior improvements to the building at 418 Shelden Ave. The five-year loan will have a 4% interest rate.

Since the building had already been used as collateral on another loan, Julien will put up its building at 706 Shelden Ave.

The inside of the building will be redivided to create two new tenant spaces, Julien Properties owner Jen Julien said during Wednesday’s meeting.

“Rhythm is split in half and becomes two more spaces,” she said. “And then Citrus is split in about a third and becomes a space to the right when you enter and then a space to the left.”

The loan does not cover the full project budget. Julien Properties will cover the rest, Julien said Wednesday.

Julien Properties and other associated companies have two loans out with the city: a 2021 loan for The Vault, and a 2023 loan to finish the Observatory Lounge at the Hampton Inn. About $186,000 is left to be paid of the original $225,000 of the two loans.

The fund has a $196,731 balance. The city’s revolving loan committee recommended granting the request, City Manager Eric Waara said.

Because loan recipients are mostly making payments on time, that balance goes up every month, said Councilor Mike Needham, who summarized the committee’s conversation. It had also been a while since the last time the committee issued a loan, Needham said.

“…The whole purpose of having the fund is to give loans, not to just arbitrarily not,” he said.

The Michigan Economic Development Corp. provided the original seed money for the fund. Waara said he is looking at state and federal programs that could either enhance the downtown fund or help capitalize an additional fund to use beyond the downtown.

In other action:

The council passed on a request from Portage Township to provide half of the $40,000 cost of road repair for Gaffney Road, an access road within the township next to the Houghton Middle/High School building. Waara and council members said there had been no precedent for the city contributing funds for roadways in other municipalities.

The council scheduled budget workshops for April 17, May 1 and May 15. All three will start at 5 p.m.

The council approved qualified licensed entities for the city’s social district. Participating so far are the Keweenaw Brewing Co., The Den and the Ambassador.

Waara said the city plans to hold an open house regarding streetlights in West Houghton neighborhoods on April 10. The council voted in February to seek more input from residents before any decision on adding lights.

Waara also said he had an initial meeting with engineers working on a site plan for property by the Keweenaw Chamber of Commerce office.

Police Chief John Donnelly said since the previous meeting, there had been 95 calls for service, one felony arrest, nine misdemeanor arrests, six civil infractions, one city ticket, seven crashes and 15 calls for health and safety. Donnelly thanked Cpl. Kirk Mills for his work as school resource officer. He also congratulated the UPSET West team on the recent sentencing of Mohawk resident Gregory Knuuttila to 27.5 years in prison for meth distribution.