Don Julio gets $35k loan from city

Pine City has approved a loan to Don Julio Pine City Inc., with the stipulation that the new restaurant provide employment for 10 full-time workers.

With this loan, the new restaurant at 1120 Hillside Ave. could open in as little as 45 days.

The loan of $34,583 from the Pine City revolving loan fund is being combined with $69,167 from the Entrepreneur Fund (www.entrepreneurfund.org) for a total loan of $103,750.

The loan has a 10-year amortization at 8.25% with 1% being a loan administration fee applied by the Entrepreneur Fund.

Economic Development Authority votes

At a special meeting on Oct. 17, members of the Pine City Economic Development Authority voted to approve the loan on a 4-3 vote.

Speaking in favor of the loan, EDA Member Frank Christopherson said that after speaking with Erica Morales, the owner of the business, he was more comfortable giving the loan. EDA Member Tom Gahler noted that Morales and the landlord for the business had plenty invested in the business and location already.

EDA Member Dan D’aigle voted against the loan. He noted that the loan had no collateral, only a personal guarantee from Morales. He noted that the Don Julio chain has been successful, but said that if the business fails, it would only cost Morales $2,500 to get out of the loan from the city.

“I don’t feel that she is capable of getting this loan conventionally at the bank,” D’aigle said. “I’d like to see her in Pine City. I’d like to see the deal come together. I’m just not in favor of how it’s being proposed. I don’t want to be the roadblock here, and I’m not trying to cast any shadow on this operator. I just think we could have and should have done better on this.”

EDA Member Mike Sauser said the EDA should save its money to use on other projects.

“I look at the much longer game,” Sauser said. “Our industrial park is ... running out of land. We’re going to have to be investing in some new land.” He said he believed the restaurant would bring people into the area, but was also concerned that the loan had no collateral.

Also voting against was Kevin Anderson, while Steve Ovick and Carl Pederson voted in favor.

Pine City Council votes

The Pine City Council then voted unanimously to approve the loan.

Council Member Brian Scholin said he appreciated all the work and thought the EDA put into the loan decision.

“Everybody has a different viewpoint on what you need to be concerned about when you enter into an agreement like this,” Scholin said. “I have to say, the amount of government skin in the game, that $34,000, is pretty small compared to what a lot of entities have involved in this already. I’d like to make a little comparison here. This is about half of what we’ve got in the railing on the freeway interchange ... I think this is a no-brainer from our standpoint. “

“I’m happy that Don Julio ... chose our town,” said Council Member Gina Pettie.  “I think we’re fortunate to have that opportunity for them to come. And I also think that’s what we need – a little diversity.”

Council Member Steve Ovick said he was grateful for the perspective of the EDA members.

“Even with this loan, there’s no guarantee that [Don Julios is ] going to open the doors,” Ovick said. “I mean, that’s not a given. But ... if we can get 10 full-time jobs in town ... the gain is better than the risks we’d be taking.”

“It’s about drawing to the community any way we can, to bring people here, resources, businesses,” said Pine City Mayor Carl Pederson. “So I look at this as an investment in the future growth of the community. I’m optimistic that they’ll do well in our community. And I think our community will welcome them with open arms.”

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