The breaks: How the city might help Elliott Bay pay for its Capitol Hill move — UPDATE

The new Capitol Hill home of Elliott Bay Book Co. at 1521 10th Ave. (Photo: Justin Carder)

UPDATE: Our citywide news partner at the Seattle Times talked to Elliott Bay Book Co. owner Peter Aaron Friday afternoon and asked him about the city’s loan program. Aaron said he has not formally applied for a loan through the city’s new program. “I don’t think I’m going to need it,” he told the Seattle Times.

Original Report:
Elliott Bay Book Co. is moving to Capitol Hill and you might be surprised to find out who could be footing part of the bill for the move. Officials at the city’s Office of Economic Development tell CHS that they are currently evaluating a request from Elliott Bay owner Peter Aaron for a loan that could help the troubled retailer survive a costly re-start in Pike/Pine.

“We are evaluating a request to help him finance his business at the new location,” OED real estate finance manager Ken Takahashi said. “We have not yet provided financing to him. We have talked with him to let him know what is available and are now doing a risk analysis and evaluation.”

CHS has not yet talked with Aaron about his financing plans and his discussions to date with the OED. We will update this post when we do.

The loan process is part of a new Grow Seattle Fund program that is flush with newly available federal cash. OED communications director Karin Zaugg Black said her office, in addition to resources to help businesses navigate city government to get the permits, licenses and information they need, has $79 million in funds available to offer loans to small businesses.

Takahashi said a small business might come to the city for help because banks have turned them down. The Grow Seattle Fund program is a little more small business friendly. “The business fund tends to be a little more fliexible than what the banks are offering,” Takahashi said. “Federal rules require certain standards. We can be more flexible and provide better terms than a bank right now.”

While Takahashi could not yet reveal the details of the loan Elliott Bay might take from the city program, he said he expects most loans from the program to be in the $100,000 to $200,000 range and max out at $2 million. The loan products vary in financing structure and terms with interest rates ranging from a floating rate at 4.75% with quarterly adjustments to the fixed rate loan types at 7% and 8%.

Takahashi said the evaluation process includes analysis of the historical performance of Elliott Bay’s business and projections for how Elliott Bay will develop in the future. But unlike other city business issues, the resulting reports won’t be available publicly. The private financial institution Grow America Fund serves as the actual provider of the loan in partnership with the city program.

If Elliott Bay ends up taking out a loan through the program, it will be one of the first in the city to take advantage of the brand new program. So far, only one other company has received a loan from the program: Alpha Cine, a motion picture film lab in South Seattle.

The city’s loan program also won’t be the only deal available to Elliott Bay to make the move possible. Crosscut reports that Aaron’s new landlord, Capitol Hill-based real estate developer Hunters Capital, cut the retailer some breaks to seal the deal for the 10th Ave move.

Say what you will about hard work and great ideas — these are the kinds of breaks a business needs to survive. “Priority one is to make sure each business can be successful in Seattle,” OED’s Zaugg Black said. “Our office has been working up on the Hill helping to re-energize the business environment. Now we can build on that.”

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6 thoughts on “The breaks: How the city might help Elliott Bay pay for its Capitol Hill move — UPDATE

  1. If loans do not come through I think there would be community support to help with the move. I am thinking of donated remodeling/construction labor like a Habitat for Humanity project, an old fashioned barn raising, or that church outfit that builds a church in 3 days (Jehovah’s Witness perhaps?) Elliott Bay would ony have to hire the construction boss and buy doughnuts. For the physical move of books voluntes could do it in short order. Eliott Bay wold just rent the trucks and have good maps and leads to direct them to new shelfs. Another possibility would be to sell “construction memberships” that would entitle those who pay 50 bucks to a lifetime 10% discount. The community seems to be saying we want to have an alternative to Amazon with a brick and morter presence. I think they will respond and lessen the debt load of the bookstore and make it more viable. Perhaps the Chamber of Commerce could work with Elliott Bay and show something more meaningful than their new logo.

  2. Something more than a logo is asking a lot … The Chamber has blown through hundreds of thousand of dollars in the past three years, and most of us on the Hill can’t tell what they did with it … oh, networking. And keeping the petunia watered in the hanging baskets, hired labor of course.

    But, maybe there is hope for a hands on approach… maybe.

  3. The OED already turned him down for a loan in Pioneer Square.

    Is the city now thinking of giving him money to leave? They’re actually paying to further eviscerate Pioneer Square???

  4. Hey it’s a business, a bookstore and expensive at that! The city should provide me a job before providing a bookstore for profit any financial relief.

  5. It’s a small business loan, the city would not be “paying” for anything. It’s also Federal money (Federal rules), not city.

  6. As a banker, I am skeptical of Seattle bureaucrats being able to wisely administer taxpayer dollars though lending programs that would support companies that have been turned down by banks. Perhaps that is not strictly the case here, as we haven’t been told why EBB thinks it might need to go that route. If the store was a losing concern in its old location, on what basis should be assume that things would be better in a new location, close to where a venerated bookstore just closed shop? I support independent bookstores, so I guess I will have to add my patronage at the new location in order to help the store’s effort to repay the taxpayers.