Hollister Council changes rules for financing new downtown businesses

what might have looked Encourages startups in downtown Hollister by offering low-interest loans for restaurants, commercial/non-kitchen businesses, disability access upgrades, and sidewalk improvements, like Innovative Ideas on May 2nd turned out not to be the case with Hollister. The staffer told city council on Oct. 3 that only two applicants had completed loan documents. The city was ready to offer 2% loans for up to 15 years.

At its May 2 meeting, the council directed city officials to establish a low-interest business loan program for all eligible businesses in the downtown area. The aim of the program is to create jobs that stimulate economic growth, boost downtown vibrancy and improve living conditions for residents of the community.

“The business loan program is funded through the General Fund, made possible as a result of the Income Replacement Fund under the American Relief Plan Act,” Assistant City Manager Dave Milione told Benitrink.

On October 3, Alderman Tim Burns called the plan to provide loans from a $2 million pool a case of “overthinking” on the part of the city council. To get a loan of up to $50,000 for a retail or non-kitchen business and up to $150,000 for a restaurant, the building owner had to co-sign the loan. They quickly removed the requirement because it proved to be an insurmountable obstacle to securing a loan.

Of the 12 people who expressed interest in the program, only two applied. They were unsatisfied with some details and asked the council to consider changes.

The three new business owners told the council how they were running the facility without a loan, but after pouring much of their own money into the business they needed more than the city provided. , called for a different approach to the loan approval process.

Owner of Priscilla and Mike Jones Mmm churros! described themselves as High school sweethearts married for 18 years who moved to Hollister from East San Jose in 2018.I have operated as a cottage In our food business, we cook churros at home and sell them online. However, food cannot be sold in the new building on 7th and San Benito streets, said Priscilla Joan.

She said they own the building so they don’t need a co-signer.

“The problem is that we don’t have enough money for the necessary renovations as a commercial kitchen,” she said. They were asking for $150,000 for her top dollar, but they said they needed $300,000. “We’re not going to open with the $150,000 loan we have.”

Mike Jones adds: [the $150,000 loan] It doesn’t take us to our goal. I would appreciate it if you could investigate. Perhaps it is per business and could be what the business needs. Other businesses have different needs than we have. I wanted to invest in Hollister, so I invested in the building. ”

They said they participate in community art projects, including new projects. mural It is located on the side of a building by artist Venezia Prudencio.

“Our business will bring about 25 jobs to the city.” Priscilla Said. “Our contractor is ready. The city has a plan. As soon as we received the money, the contractor said he would be done in three and a half months.”

Edgar and Diana Mallorca recently opened Cafe Con Leche on Monterey Street across from the Superior Court. He said they would like to renovate the space themselves and apply for a loan, but the building owners won’t co-sign.

Edgar Mallorca said, “We have secured our home and our assets are over $150,000. Approval required [for the $150,000 loan]”

Raul Escaleno is his Mangia Italian Kitchen, due to COVID, located on 1709 Airline Highway. Not only did he manage to survive the pandemic, but he made plans to take over the now-closed Hollister Bar and Grill on the corner of San Benito Street and his Fifth Avenue. His plans for a fine dining restaurant balermoved slowly for the renovations the city needed, mainly due to the need for a dishwasher where he installed a new dishwasher and built a wall to block the doorway to the lobby next door.

“Downtown can be a little scruffy, but as we add more businesses, we’re going to uplift the atmosphere and make it a little more family-friendly,” he told the council. owes nothing for it, paid $120,000 in cash in one year.”

It took the city two years to approve the permit while investing its own money.

“I don’t need help with construction,” he said. “We need help with working capital. If a business like ours is on track, it will be successful, so I would really appreciate it if you could dismiss the landlord. If you can remove the landlord now, we can start together. If we can get the money now, we can open with a big bang.”

Mayor Brett Miller said the council has instructed staff to include that the building owner must also sign the document. He said the building owner did not want to take risks if the restaurant went out of business and would have to dispose of the kitchen equipment if the next business was not a restaurant.

City attorneys considered other options for securing loans, such as the property owner having an existing loan with the city or listing the equipment, home, or vehicle as collateral.

Mr. Burns was concerned that there were so few applicants in five months. He asked if the city would be more helpful if it had an ombudsperson rather than staff to assist applicants. He hinted that the task could be too big a task for his one member of staff to handle.

He also admitted that he “led the prosecution” for insisting that the property owner co-sign the loan, adding, “We are not successful … Other alternative forms of collateral should be considered.”

Alderman Dolores Morales suggested that loans should be made more open to allow business owners to prioritize needs over construction requirements. City Councilman Laurent Resendis asked how the city would recover the costs of the Americans with Disabilities Act or sidewalk improvements without collateral. He said property owners, not business owners, would benefit from these improvements and would like to reorganize the program. He would like to get some kitchen supplies and put the cost towards something that can be recouped. ”

Alderman Rick Perez said business owners shouldn’t be concerned about the cost of sidewalk repairs because sidewalks belong to the city and it’s the city’s responsibility to repair and make them handicapped accessible. He also said the loans had to be made in a “timely manner.” [without it] It hinders their growth and ours. We need to find a solution as soon as possible. ”

According to Miller, the 2% interest rate over 15 years remains the same as before. Now, instead of being co-signed by the property owner, the applicant can use collateral to guarantee the loan. Among the major changes to the program, Miller said:Loan requests over $150,000 must be submitted to the council,” he said, adding that applications can be submitted immediately.

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