State offers businesses low-interest loans
Tonganoxie's revolving loan fund has been extended until December, but city planner Linda Zacher has only received applications from two businesses.
The loan grant, originally set to expire in July, has been extended until winter. Zacher sought the extension from the Kansas State Department of Commerce and Housing.
The department offers a $120,000 revolving loan for the city that is available to city businesses for improvements of storefronts. Zacher pursued the extension in hopes of getting more applications.
The loan is part of the Comprehensive Development grant, which primarily provided money for the revitalization of Fourth Street. The grant also consists of loans for upper levels being used for apartments and administrative purposes.
Zacher said money awarded for business loans will always stay with the city, but unused grant money won't be available after December.
"Two or three businesses have expressed interest," Zacher said. "Others haven't come in.
"We can't do anything until they come in."
Some businesses renovated storefronts after the downtown redevelopment was complete, but didn't seek loans. Zacher said some businesses didn't want to go through the wait for the loan.
Matt Bichelmeyer, though, is utilizing the loan fund. Bichelmeyer, owner of Bichelmeyer Steakhouse, made renovations to the restaurant by adding a new awning and front door.
Bichelmeyer's additions came before the loan went through.
"We worked out a deal to reimburse for what I had done," Bichelmeyer said.
Jack Cronemeyer, who hopes to open Bad Jack's Southwest Restaurant at 416 E. Fourth before the start of Leavenworth County Fair on Aug. 6, has been approved for his loan, but has gone ahead with renovations as well.
"We're going to complete all those improvements," Cronemeyer said.
The improvements include a roof, doors and new stucco. Cronemeyer, who applied for $29,000 through a five-year repayment plan, said that the loan committee will inspect the improvements and then reimburse accordingly.
The availability of the loan has already been good for Bichelmeyer.
"It's been very beneficial," Bichelmeyer said. "It's paid back at a very low interest rate."
Loan payments in full in two years or less have no interest rate or loan fee.
Payment in three to five years has a 2 percent interest rate and a 0.5 percent loan fee; payment in six or seven years is three percent and 1 percent; and eight to 10 years is 4 percent and 1 percent.
Bichelmeyer has an overall loan of about $25,000 and has used about $11,000 on the first renovations. He is also hoping to fix windows on the restaurant's second level with remaining money, but hasn't found anyone to install the windows.
Businesses also had the option of turning upper levels into apartments, but Bichelmeyer didn't pursue that loan that would involve the business generating $17,000 and the city matching it with the loan. Bichelmeyer said he considered that renovation, but it would involve numerous regulations and many inspectors, things he thought weren't worthwhile to him.
"As far as I was concerned, that was a little too much red tape," Bichelmeyer said.
Businesses interested in the revolving loan must fill out an application and take an estimate with detailed descriptions of proposed expenses to the loan committee. Upon the committee's approval, businesses' bills are submitted to Zacher. They then are sent to Topeka for reimbursement.
Loan committee members are Wanda Williams of the Wander In, dentist Grant Ritchey, Chris Donnelly of First State Bank and Trust, First State attorney Bill Grant and city council member Kathy Graveman.