By DAVID A. MANN
Potential restaurant owners looking for help covering start up costs now have a new option.
The Jeffersonville Redevelopment Commission approved a resolution Wednesday night creating a new forgivable loan program. Applicants interested in opening restaurants in certain areas of town — particularly within special taxing districts downtown, along 10th Street and around Veterans Parkway — can utilize loans of up to $50,000.
“There’s been a big push by the Downtown Merchants Association to try and boost business in Spring Street buildings,” said Mike Hutt, president of the Jeffersonville Redevelopment Commission. He believes the program can provide a means to that end.
Rob Waiz, executive director of economic development for the city, said three businesses are already interested in applying for the loans. Hutt noted two of them were along 10th Street and the other was downtown.
Loans will have to be approved by a committee that includes the economic director, the city’s planning and zoning director as well as representation from area financial institutions. The commission approved $100,000 in initial seed money for the program.
The plan restricts how the money can be used. For instance, an applicant can use loan funds to repair floors or install permanent fixtures but can’t use it for permitting fees or trade specific items, such as brewery equipment.
Further, there are restrictions on who can apply. For example, an eligible business has to earn at least 65 percent of its revenue from food and beverage sales and must provide sit-down food service.
The city will make the loan to the business but ultimately, the owner of the property is responsible as a lien is filed as collateral. Ten percent of the loan amount is removed each year the business is open and the lien is removed once the debt is gone.
For the most part, revenue generated by tax increment finance, or TIF, districts will be used to fund the loans. Those opening new eateries downtown could also have their loans funded in tandem with another taxing district, known as the Urban Enterprise Zone. The Urban Enterprise Association, the board that oversees that revenue, still needs to approve the program as well.
The idea has been discussed for several months, as it was initially proposed by the city’s last economic director, Clarence Hulse.
And it’s not a totally new concept for Jeffersonville.
The city has similar programs in place including a revolving loan fund that can be used by all types of businesses, not just restaurants. There’s also a facade grant program which makes money available for business owners looking to spruce up their properties.