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News
Oswego pizza pub's loan request questioned : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, IllinoisOswego pizza pub's loan request questioned
| Village board members cite late payments among concerns
| by Matt Schury
| 1/31/2013
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Some Oswego Village Board members voiced concerns last week concerning an economic development loan the village issued to Firehouse Pizza and Pub in late 2011.
The issue came up during the village board's committee of the whole meeting Jan. 29.
The board discussed a recent request by the owners of the restaurant in the village's downtown asking the village to pay additional funds to help cover the cost for a waterline improvement to the business and for the construction of a section of a retaining wall on an adjoining property.
Both items will be on the agenda for a vote at the board's next meeting Tuesday, Feb. 5, at 7 p.m.
Some board members said they were uncomfortable with contributing additional funding because the village has been receiving late payments from the restaurant owners. They also said they heard that village staff has not been treated with respect by owners of the business.
Owners Bill Lumino of Oswego and Dominick Fecarotta of Plainfield opened the restaurant late last year in a formerly vacant building at 65 Washington Street (U.S. Route 34) at Adams Street following extensive renovations to the building.
The village owns the building.
In 2011 the board approved a lease purchase agreement and $130,000 economic development loan for the Firehouse Pizza and Pub.
Funds for the low interest loan came from the revolving loan fund program offered by the village with revenues provided by the Illinois Department of Commerce and Economic Opportunity. The interest rate was set at three percent, according to a resolution approved by the board to authorize the loan.
Lumino and Fecarotta are now asking the village to pay an additional $24,376.82 to help cover the cost for the water line improvement to the business and for the construction of a section of a retaining wall on an adjoining property.
Police Chief Dwight Baird was the acting village administrator when the restaurant was originally proposed to the village. He said the original agreement said the water line improvement would cost $9,000, with the village contributing half off that cost.
Baird noted that it was subsequently learned the "entire water line for the building to the water main needed to be improved" which increased the cost from $9,000 to $35,861. As a result, the village's potential 50 percent share of the water line cost would be $17,930.50, according to Baird.
In a memo, Baird noted the restaurant owners were required to replace a retaining wall located behind the building for safety purposes and provide sewer upgrades under terms of the lease agreement.
The old wall was damaged as a result of a heavy rainfall last April, according to Baird. In order to improve the appearance of the property and make the wall secure, a new wall made of rebar-reinforced concrete was needed.
Baird wrote in his memo: "By having it (the retaining wall) constructed this way, it will allow for future parking on the upper level behind 63 West Washington Street, which is currently still the village's property."
According to Baird, the village's cost to install the portion of the wall on the 63 West Washington Street property is $6,446.82, based on an estimate prepared by the village's chief building inspector Ron Fox.
Village President Brian LeClercq noted that the village did agree to pay for infrastructure improvements in the downtown area a couple of years ago.
"In my mind this is one of those things that fall into that category," LeClercq said.
'Pattern of behavior'
Board member Gail Johnson said she had some issues with increasing the village's contribution.
"I rarely voice an opinion against staff recommendations but I have some issues with what's going on regarding this petitioner.
"First we have a pattern of behavior regarding disrespectful treatment of (village) staff," Johnson said. "The second is late payments-we've had at least two and then they make up for the late payments with an NSF (non-sufficient funds) check. That's a pattern that shows me they're not responsible and it shows disrespect to the village."
Johnson said that in this case no one came to the village saying they have a retaining wall that needs to be bid and they also didn't come to the village right away with the water line issue.
"There's also a pattern of unresponsiveness," Johnson said, adding that she has notes going back to last June of things the village requested that the owners didn't responded to.
"I have no faith that our loan is going to be repaid," she said. "I cannot justify putting another penny forward. If the majority of this board decides-I will not vote for it-but if you decide to give them the money and I would suggest pulling it off the backend of the loan because I have no faith that that's going to happen."
She added that "the nail in the coffin" was the message they received from the owners saying the board didn't come to see how they were doing once they opened.
"I'm sorry, you yell at our staff, you give us NSF checks, you don't show up, we pull this off the agenda. I'm just having a real hard time. It feels like it's been disrespect to me," she said. "I'm very uncomfortable with putting out any more money. I'm even uncomfortable with the $4,500."
Baird mentioned that the village is only required to bid projects that cost over $10,000. He added that it was discovered they needed to go farther in repairing the wall.
Board member Jeff Lawson said the owners previously did facade work and then went to the board and asked for more money.
"We went ahead and did that and then said, 'Now in the future let's not get into that trick bag again,'" Lawson said.
Board member Terry Michels said he had some of the same concerns as Johnson.
"I've been uncomfortable with this as well," Michels said.
He recalled that when the owners came before the board asking for the low interest loan he was skeptical but gave in and agreed to give them the money.
"When we asked for a business plan, it was a handwritten business plan," Michels said, adding, "It was a pretty poor, poor business plan."
He added that he didn't know if the village would have recourse if the money were approved and then not paid back.
"I had the gut feeling when they presented their business plan initially. I gave them the benefit of the doubt, and I don't have a good feeling on this and I, too, wouldn't support it," Michaels said.
Board member Judy Sollinger agreed that whatever is approved should be added at the end of the loan.
Baird said he just recommended paying for the retaining wall and not the water line until they close on the property.
In the meantime, LeClercq said the business seems to be coming along.
"The business is doing well and the parking back there could be enhanced a little bit," LeClercq said.
John Etheredge contributed to this story.
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