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HRA staff recommends $100,000 loan for Lenore Bridal; loan contingent on borrower filling $31,500 gap
Summary
Staff recommended a $100,000 business assistance loan to Lenore Bridal to support expansion downtown; the loan was presented for board feedback and will return for formal action after the borrower secures roughly $31,500 in non‑debt gap funding.
Senior project manager Annie Burn presented an introductory staff report to the Housing and Redevelopment Authority proposing a $100,000 loan from the business assistance fund to support Lenore Bridal’s planned expansion into a larger downtown retail space.
Burn said the project’s total cost is about $263,127. The borrower reported existing equity of $42,263 (about 16%) and an SBA loan of $89,300; staff described a remaining financing gap of roughly $131,000. The credit committee recommended a $100,000 loan, with proposed terms described in the presentation as a 10‑year term and a two‑year deferral; staff said the committee used stress testing and underwriting to arrive at this recommendation. The loan would use business FF&E as collateral and require personal guarantees from both partners.
Staff emphasized that the loan is contingent on the borrower securing about $31,500 of non‑debt (equity) to fill the remaining gap before closing. Compliance requirements noted on the record include prevailing wage where applicable, the city’s two‑bid policy, the vendor outreach program (staff said roughly 25% of eligible project costs should go to certified vendors as a good‑faith target) and affirmative‑action/EEO obligations. A $1,000 closing fee was identified.
Commissioners asked clarifying questions: staff confirmed the borrower repaid a prior business assistance fund loan in full; underwriting will rely on projections for repayment (a five‑year pro forma) rather than only historic revenue; and staff said there is no hard deadline to close but landlord improvements are expected to finish mid‑January and the borrower hopes to open in February. Several commissioners requested continuing status updates and noted interest in supporting downtown small businesses, including a follow‑up look at downtown signage rules that affect storefront visibility.
Staff did not ask for final board action at this meeting; the loan will return for a formal approval vote once the contingency is satisfied and underwriting is complete.
