Adopt Resolution #24-020 Approving Loan from Restaurant Subsidy Program: Bossman Inc. dba Chanticlear Pizza

The purpose of this case is to consider approval of a loan request by Bossman Inc. for financial assistance utilizing the Restaurant Subsidy Program.  Staff has received a complete application and the EDA has reviewed it and has provided a recommendation.  Feedback from residents, businesses, visitors, and elected/appointed officials states that attracting more restaurants is a priority for Ramsey.  On February 8, 2021 the City of Ramsey adopted a WAC and SAC Assistance program that provides forgivable loans for new and expanding "dine in, full service restaurants" in Ramsey.  The city has received an application from Bossman Inc. dba Chanticlear Pizza for a forgivable loan relating to the 11 units of SAC and WAC Fees for a new restaurant build-out in the former Anytime Fitness location at 7876 Sunwood Drive NW, Unit 100 in Northstar Marketplace. The loan request meets the qualifications of the Ramsey Restaurant Subsidy Program.  Staff is asking the City Council to consider funding this request.

None required

The proposed 1.63M in private investment would help bring a 5,165 SF Chanti Grill concept to Ramsey; similar to locations in Coon Rapids and Maple Grove.    The full SAC Charge (Metropolitan Council) is estimated to be $27,335.00 and the WAC Charge (City of Ramsey) is estimated to be $16,291.00.  These fees total $43,626.00. Bossman Inc. dba Chanticlear Pizza is requesting a loan of $30,538.20 (70% of the Toal SAC AND WAC Charges) from the Full Service Restaurant Subsidy Program (See attached). The negotiated lease for Chanticlear will commence in January 2024 with construction commencing shortly after when the building plans have been reviewed and a permit is issued.  

The project will result in approximately 39 jobs coming to Ramsey.  21 of the jobs would be full time and 18 of the jobs would be part-time with wages starting at $18.00/hr.  A summary of the anticipated hirings for this location is attached to this case.

The owner is securing $987,000 in private bank financing, providing an injection of cash and is requesting a City SAC and WAC forgivable loan.  Staff supports approval of a 70%, 0% interest loan, forgivable loan for both the SAC and WAC Fees in the amount of $30,538.20; subject to satisfactory underwriting by CMDC.  The proposed funding sources for the loan would be the City Water Fund (WAC) and the EDA Fund (SAC).  The applicant would also be required to pay $13,087.80 (30%) for the SAC and WAC charges upfront and closing costs estimated to be $1000.  The financing of this deal would likely include a loan agreement, and a subordinated UCC filing against collateral owned by the applicant.  The applicant leases the space and a real estate mortgage would not be obtainable in this circumstance. Staff will work with the applicant to gather necessary financial information necessary to complete underwriting of the loan and the drafting of the loan documents if the loan is approved by the City Council.  The Applicant has already provided the majority of the financial information/projections needed to complete underwriting and just a few more pieces of information are needed.  

Loan Approval Recommendation

1. City Council approval of a forgivable $30,538.20 (70%) SAC and WAC loan to Bossman Inc. dba Chanticlear Pizza; subject to underwriting by CMDC and City Attorney review (Staff/EDA recommendation)
2. City Council approval of a $________ (__%) SAC and WAC loan to Bossman Inc. dba Chanticlear Pizza; subject to underwriting by CMDC and City Attorney review (with changes)
3. Something else

$11,403.70 - City Water Fund
$19,134.50 - EDA Fund