Sonoma officials bet on attracting a thriving business to one Sonoma’s most prominent retail locations when the city offered a $92,000 loan to the owners of 400 First St. E., a Plaza corner last occupied by Cucina Viansa.
Two years later, the planned rehabilitation work is unfinished and the Old Creamery Partnership is in default for $57,461.
The building, vacated mid-lease by Cucina Viansa in 2006, sits empty and is for sale.
The ownership group has been given a July 16 deadline to pay back the money, including interest, or propose a modification of the loan. The city has already granted one deferral, in December 2009, for the group to get a new plan together, which it failed to do.
Mick Alberigi, one of the owners, told The Sun this week the group will present a proposal to the city by the deadline. “We will work this out,” he said.
The current status of the loan is that the owners have drawn down $57,461 of the $92,000 loan. According to a city staff report, “No payments on the loan have been received … causing the loan to fall into a default status.”
Assistant City Manager Carol Giovanatto said the money spent so far as all gone to legitimate repairs, but a survey shows there is much work to be done to bring the structure up to all codes and regulations.
Alberigi said the daunting list of mandated upgrades has led to the delay. “The city has been very helpful, and we’re working with them,” he said. “But they want a grandfathered old building at 2010 standards.”
Efforts to attract a new tenant for the space accelerated in May of 2008 when the Community Development Agency approved a $92,000 loan for commercial improvements to the property. The work was to be completed by October 1, 2008.
As for repayment, under the terms of the Community Development Agency’s loan, payments are to be reduced by the amount of sales taxes received by the city which are generated by the business. Since no business is in place at 400 First St. E., no sales taxes have been generated, making the building owners responsible.
The first payment was due on Oct. 1, 2009 and remains outstanding.
At a Community Development Agency meeting in November 2009, the owners requested to defer the first payment and, according to report, “expressed interest in seeking additional assistance from the CDA” to bring the building into use as a restaurant.
Complicating the issue, city staff reported, is “a lack of unity among the owners as to their intentions regarding their existing CDA loan (e.g., whether to draw down the remaining loan funds) and their plans to request a loan increase or other modification.”
A subset of owners requested a meeting to consider a loan increase, but has failed to provide information specific enough to warrant such a meeting.
Another ownership faction stated to city staff, via e-mail, that that they do not want to spend any additional funds on the building and “will not be responsible for any future funds that may be advanced/borrowed from the City of Sonoma on the existing note or a future note.”
Alberigi denied any rift among the owners. He said the group will present a unified plan to the Community Development Agency board by the July 16 deadline.
