City brewpub loan OK’d but not without dissent

Official who voted no says she ‘can’t get over amount of money the city is contributing’ to marina lot project

The Port Washington Common Council last week agreed to lend Inventors Brewpub $150,000 from the city's revolving loan fund to help pay for equipment at its new facility (show in the rendering above) to be built on a marina parking lot once owned by the city.
By 
KRIS HALBIG-ZIEHM
Ozaukee Press staff

The Port Washington Common Council last week agreed to lend Inventors Brewpub $150,000 from its revolving loan fund to help pay for equipment at its new facility on the north harbor slip.

Aldermen voted 6-1, with Ald. Deb Postl dissenting, to approve the loan.

“I cannot get past the amount of money the city is contributing toward this project,” Postl said. “I think that to this point what the city has contributed is sufficient.”

Tom Urban, 1002 Hales Tr., told aldermen that they should not approve the loan, saying, “the funding of equipment for Inventors goes beyond reasonable investment.”

Kathleen Cady Schilling, executive director of Ozaukee Economic Development, noted that while construction of the brewpub’s new building is being supported by a developer’s incentive, that payment is to TBF Development and not Inventors.

“This loan is to the business, not the developer,” she said.

The loan to Inventors, she added, will be used to pay for equipment that will allow the brewpub to expand its capacity from its current two kegs to 10 kegs and for items needed for its restaurant and event space.

Inventors is currently leasing the Van Ells-Schanen American Legion Hall, which limits its ability to expand, Cady Schilling said.

With the new facility, Inventors will not only be able to expand its brewing, it will also have a 3,200-square-foot restaurant with indoor seating for 160 people and an event space, she said. Offices would round out the rest of the 25,000-square-foot building.

The loan will be at 1.75% for 10 years, with principal payments deferred for the first six months ­— Cady Schilling noted that it will likely take a year for construction to be completed.

The loan is to be backed up by $300,000 in owner equity and $350,000 in working capital financing, she added.   

In return for the loan, Inventors is obligated to create the equivalent of at least 10 full-time positions within three years.

The brewpub expects to create 24 to 30 of these positions, Cady Schilling noted in a report to the council.

Without the loan, she said, the project “will be tighter.”

“They (Inventors) have told me it would be a very challenging situation for them,” Cady Schilling said. “We’re trying to make capital less expensive.”

The revolving loan fund lends money at half the prime rate, she said, noting that a comparable bank loan for Inventors would likely be at an interest rate of 7% to 8%.

If Inventors were to fail, she added, the revolving loan fund likely wouldn’t recover its money because others would have first claim to any funds.

“The program right now is very financially viable,” Cady Schilling added, so it would continue.

“It’s not as if the city taxpayers will be on the hook in the case of default,” Ald. Jonathan Pleitner said.

The loan to Inventors is on par with other large revolving fund loans, Cady Schilling said, noting that in the recent past the city has approved $150,000 in  loans to the Harborview and Sherpers.

Inventors, she added, was approved for a revolving loan several years ago, when it considered opening in a building on Grand Avenue, but the loan was never finalized because the firm pulled out of the deal after discussion issues with the site.

The revolving loan fund, which was started with a community block grant in the 1980s, has been used to nurture a number of businesses in the city, Cady Schilling said.

Currently, the city has six active loans, all of which are in good standing, she said.

The program has a balance of $646,000, she added, with the payments made by businesses going back into the program.

Ald. John Sigwart said there’s little reason not to approve the loan.

“This is a viable business in town that’s going to bring 20 new jobs,” he said.

Noting the city approved a previous loan for Inventors, Pleitner concurred, saying, “I’m having a hard time understanding why we would vote against it.”

Feedback:

Click Here to Send a Letter to the Editor

Ozaukee Press

Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

125 E. Main St.
Port Washington, WI 53074
(262) 284-3494
 

CONNECT


User login