ACTION REQUESTED:
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Communication from the City Manager with a Request to APPROVE an AMENDMENT to the Business Development Loan to DOUBLE A'S PIZZA PUB.
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BACKGROUND: The City's Revolving Loan Fund (RLF) was established in 1988. The RLF was established with $500,000 from an EDA grant and a $269,000 match from the City. Since inception, 43 loans have been issued, totaling over $3 million. The total current RLF balance available for lending as of 12/31/14 is $886,892.21.
In 2007, City Council approved a loan in the amount of $80,000 to F.A.S.T, Inc. d/b/a Double A's Pizza Pub, to purchase equipment for a new restaurant located at 7301 N Radnor Road. The loan agreement stated Double A's Pizza Pub was to pay $819.50 per month for 60 months. In August 2012, the outstanding balance was scheduled to be paid in full as a balloon payment. A notice of payment due was not sent to Double A's Pizza Pub. The balloon payment was not made, but Double A's Pizza Pub continued to pay the $819.50 monthly payment. The current principal balance as of February 2015 is $23,284.92.
Double A's Pizza Pub continues to pay the monthly payment and has requested a loan amendment. The loan amendment would allow Double A's Pizza Pub to continue to make $819.50 monthly payments, ending in August 2017.
Heritage Bank, the lead lender on the loan to Double A's Pizza Pub, has confirmed that Double A's Pizza Pub is current and active on the loan. Heritage Bank supports the loan amendment on the RLF loan. Business at Double A's Pizza continues to be strong at their new location on Radnor Road.
Should the City Council approve the amendment for Double A's Pizza Pub, the payoff date will be August 1, 2017.
FINANCIAL IMPACT: There will be additional interest received on this loan through August 1, 2017. However, the City will not receive the balloon payment of $23,284.92.
NEIGHBORHOOD CONCERNS: Not applicable.
IMPACT IF APPROVED: The City will amend...
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