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.
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.
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.”