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MCDC approves $341,733 grant and $341,733 forgivable loan for Huggs Cafe expansion
Summary
The board approved a combined package for Huggs Cafe Inc.: a $341,733.50 grant and a $341,733.50 interest-free (for 3 years) forgivable loan (forgiveness tied dollar-for-dollar to fundraising), with interest at 3.5% on any remaining balance after the interest-free period.
The McKinney Community Development Corporation board voted to advance a funding package for Huggs Cafe Inc.'s expansion and site-improvement project. The approved motion provides a $341,733.50 grant plus a matching $341,733.50 loan that will be interest free for three years and forgivable on a dollar-for-dollar basis as Huggs raises funds. Board member S3, who made the motion, said the structure was intended to help Huggs accelerate fundraising while recognizing the organization's community mission.
Board discussion reviewed project scope and fiscal structure. A board member noted the greenhouse asset has an expected 30-year lifespan and emphasized the project's workforce-development role for people with intellectual and developmental disabilities. Members debated whether land costs should be considered sunk but ultimately supported the combined grant-and-forgivable-loan approach. The motion passed after a second; the transcript records the chair announcing "Motion passes." The vote was taken without a recorded roll-call tally in the transcript.
The board specified that the forgivable portion will be reduced dollar-for-dollar by verified fundraising and that any outstanding principal after three years will begin accruing interest at 3.5%, with interest-only payments beginning after the first three years and a balloon payment at year five if not forgiven. The board also confirmed contingency constraints on which line items in the application the funds would cover.
