by Mike Sharkey
Staff Writer
In its first meeting of the new calendar year, the City Council Finance Committee deferred a large chunk of its agenda Monday and read into the record for the second time several other items.
One of the items that was deferred is an amendment to a redevelopment agreement with Belet’s Millwork, Inc. — a cabinet making company on East 8th Street.
In February of 2004, the City entered into an agreement with Belet’s. That agreement included a $100,000 loan from the Northwest Economic Development Trust Fund and a $30,000 grant from the same source. Belet’s was to create 10 new jobs, retain 10 others and pay the loan off by Sept. 1 of last year.
Through James Richardson of the City’s Housing & Neighborhoods Department, Belet’s is seeking an extension of the loan deadline to Sept. 1, 2011. Richardson said the company has been “severely impacted” by the economy and needs the extension in order to not default on the loan. As of right now, the balance on the loan is $78,000 and the City is the first lien holder on the property.
“They have a good, robust plan in place to attract new business,” said Richardson.
The company has also been fined $12,000 because there are currently only 16 people on the payroll, not the 20 required under the original agreement.
If the Finance Committee and eventually the full Council approve the amendment, Belet’s will double its monthly payment to the City — something Richardson says has been happening since September — in an effort to repay the full loan amount. However, if a monthly payment of $1,115 is approved, Finance member Clay Yarborough pointed out the company will have a balloon payment of nearly $60,000 due Sept. 1, 2011 and questioned where the owner would get that much money.
“It’s hard to say it this point how he will address paying that,” said Richardson, who earlier had explained the plan to double the payments and apply them to the principal was the idea of the company owner. “How we go about structuring that is a business decision that will come at that point.”
Finance Chair Stephen Joost suggested putting the payments toward the interest.
“I want to set us up in the best position possible to not be here in the same position in a year,” said Joost. “There are still 16 jobs at stake. I want to work with them. I want to defer this and come up with something better.”
Richardson said he and the owner both believe the economy will rebound enough in the next year or so that Belet’s will be able to repay the loan and grow its business. Finance member John Crescimbeni said he sympathizes with the owner and what the economy has done to business. However, he questioned why the City seems to always be bailing out struggling businesses.
“We have citizens out there sustaining the same impact from the economy and we are not working with them on things like their property taxes,” he said. “I wish folks would take these contracts more seriously and prepare more to give back, especially when they were given a $30,000 grant.”
Richardson said Belet’s has been current with its original payments of $557 a month.
The Finance Committee did approve the issuance of industrial development revenue bonds for North Florida Shipyards in the amount of $4 million. The Jacksonville Economic Development Commission will administer the bonds, known as recovery zones bonds. The money will be used to purchase a mobile vessel hoist, the construction of a new launch/recovery basin and other on-site improvements.
Lindsey Ballas, business development chief for the JEDC, said the new equipment and construction will allow the company to double its capacity and create 246 new jobs.
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