City Puts Lid on Loan Pot, Chamber Says Info Lacking

El Cerrito’s new forgivable loan program for businesses — offering loans up to $20,000 in what would be free money after four years — has been idled while city officials wait for further guidance from the City Council.

The meanwhile has complained about a lack of basic information and transparency in the program.

On April 4, the council, acting as the El Cerrito Municipal Services Corporation, established a $100,000 fund, which would be used for interest-free loans to help convert commercial buildings “to a higher and better use" and make seismic upgrades.

The program called for preference initially to be given to businesses around and El Cerrito Plaza, where “we wanted to foster more of an entertainment, dining area,” Senior Economic Development Program Manager Dwayne Dalman told the council. A city staff report to the council about the program in April is here.

Essentially free money, the loans are forgiven at a rate of 25 percent a year, provided the applicant performs the proposed work. They loans are disbursed first-come, first-served; both commercial tenants and landlords may apply.

But some in the business community say the city has allocated the money mysteriously and has not answered straightforward questions posed by the El Cerrito Chamber of Commerce.

“Who is eligible? How do you get on the list? Who decides who is on the list? What’s the process?” said John Stashik, chamber past president. “Those questions didn’t get answered by the city. Based on what, is the main thing. It kind of annoys me you can’t get any answers. This is public money.”

City officials say they cannot answer those questions until the council takes up the issue again, when it will be asked to more explicitly spell out the requirements for the seismic retrofit loans. The program offers up to $10,000 for seismic retrofit work, plus an additional $10,000 for other approved work.

Part of the impetus for the program was the desire to help businesses comply with the 2009 seismic retrofit ordinance passed by the council requiring that unreinforced masonry buildings get retrofitted. Dalman noted that 17 such buildings were found in a survey to need retrofit work.

Three owners had already filed applications before the council approved the loan  measure in April.

Dalman said he expects the loan program to go back to the council July 18.

“We need them to clarify what is needed to qualify, so we’ll have a list and we can say, ‘You must do this, this and this,’” Dalman said.

Several retailers in the target area, including , Velocity Lock and Key, Grant’s Jewelry and , said the city did not notify them about the program.

Grand Barber Shop owner Jerry Sandlin heard about it — not from the city, but from Stashik. He applied about a month ago to help defray the costs of a seismic retrofit.

 “I haven’t heard anything back,” he said. “I got the plans all drawn up. I’m going to have it done, but it sure would help to have the loan.”

The new brew pub , two doors north of Cerrito Theater, was an early beneficiary of a $20,000 loan.

 “The city has been very helpful,” said David Goodstal, who launched the business with his wife and two partners. “We have to meet certain criteria, to invest it in permanent infrastructure, and we did.”

 The size of the loan “may not be huge in comparison to the amount of money we’ve had to invest, but it absolutely came at a good time for us,” he said. “For a small business, anything is helpful.”

Business and building owners can use the money to pay for architectural design services, signage and facades, seismic retrofit, accessibility improvements, fixtures, general rehabilitation and infrastructure improvements. Applicants must match the loan amount or exceed it.

Although the city is favoring applications in the theater/plaza area, anyone within the three-mile Redevelopment Area can apply.

One frequently asked question is whether the city will expand the program. When the council met April 4, Hanin said he hoped money would materialize to fund a second year, but could not commit to it.

“The item is tentatively scheduled to come back to the council in July to deal with some issues around its implementation, but I have not discussed all of the details with staff yet, so cannot comment at this time,” he said Thursday in an email message.