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Raleigh loan program helps downtown businesses grow

Posted June 13, 2012

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— While diners enjoy lunch outside The Raleigh Times Bar on East Hargett Street in downtown Raleigh, construction workers are busy knocking out walls next door to expand the restaurant.

Plans include another kitchen, an additional bar and a second floor with rooftop seating. The renovation should be complete in a couple of months.

Developer and owner Greg Hatem says the expansion project might not have been possible without a little help from the city.

"It's still a tough lending environment out there. Banks are very skittish," he says. "A lot of times they can't lend."

Hatem filled the gap with $50,000 that he borrowed from the City of Raleigh.

It's part of the Raleigh Economic Development Partnership's Downtown Loan Pool program, which lends owners of small downtown businesses up to $50,000 to set up shop or expand.

But many businesses apparently don't know about it.

Raleigh loan program helps downtown businesses grow Raleigh loan program helps downtown businesses grow

Program manager Luther Williams says that only four businesses have taken out loans in the program's eight years of existence.

Taxpayers have put $300,000 into the loan program.

Of the four loans the city has written, one has been paid in full and payments are current on the others.

Borrowers have 10 years to pay them back at approximately 3 percent interest.

With business picking up in downtown Raleigh, Hatem says the loan program is a success story that breeds other success stories.

"It allows people to get into these spaces where, normally, they couldn't," he says. "And that's at the heart of the revitalization of downtown."

15 Comments

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  • FlySwater Jun 14, 2012

    If a business is legitimately viable for expansion, why do they need a loan from the city? A bank will loan you money if they have a reasonable expectation of getting it back.

  • nomorethanthat Jun 14, 2012

    When Raleigh made this loan to the Times they failed to put a rider on it to have the Times bring its outside dining area into both ADA compliance and the tenants of its outdoor dining license. Back in Sept 2011 the facility was known to be out of compliance. When the loan was secured those issues had not been corrected.
    Currently patrons of the restaurant sitting at tables along the curbing have had to scramble when the back end of a car backing into a parking space encroached into the space where they were sitting. Blind pedestrians, handicapped in a wheel chair or using a cane and parents pushing a stroller have problems getting thru the gambit of the sidewalk seating area have difficulties.

    All of these problems could have been corrected if the city did due diligence in requiring that they be eliminated in order for the Times to get this sweetheart loan.

  • GK N.Ral Jun 14, 2012

    Greg Hatem owns 5 or 6 or 7 restaurants in Raleigh. Is this loan program even legal? Are there laws that regulate loaning money to businesses by government agencies? I resent the city of Raleigh loaning taxpayer's money when so many things in Raleigh need improvement.

  • superman Jun 14, 2012

    My idea of success is not awarding 4 loans over a period of 10 years. It was a success because he was able to get the loan. When will government learn to stay out of private enterprise? If it was such a good deal people wouldnt have trouble borrowing money. Have you noticed the empty buildings and the cars packed into used car lots? The city gave him 50k but they just dont know it yet.

  • getajobubum Jun 13, 2012

    You people are crazy...The city of Raleigh does these things in order to create more businesses and give incentives for businesses here. This is another way the city can make money. How about we stop funding people's retirements by cutting social security or government handout programs...you're not complaining how much your tax money goes there.

  • aspenstreet1717 Jun 13, 2012

    Remember The Mint? Closed. Banks won't lend because they know better. Remember Solyndra? Banks knew better.

  • lolly Jun 13, 2012

    "Of the four loans the city has written, one has been paid in full and payments are current on the others"

    Who are these 4? If they are corporate fronts, who are the people behind the fronts?

  • archmaker Jun 13, 2012

    don't have a problem with a government loan program that creates jobs, increases the tax base, and makes money on the interest in return - however, "cheers" is right - loaning money to greg hatem because the restaurant is a small business (one of his many) is ridiculous. of course, developers have lived decades off other people's money.

  • InnocentBystander22 Jun 13, 2012

    oh great!!!, just more taxpayer money being wasted on waste. Thank you city of raleigh for using taxpayer funds to build a bar

  • cheers Jun 13, 2012

    I think it is ridiculous that Greg Hatem gets this loan. Why? Because these loans are intended for businesses that are not able to get financing or are struggling. And to watch him on television just now saying it is a tough borrowing market is misleading.

    He just purchased a building in west raleigh for well over a million dollars. (http://www.newsobserver.com/2012/05/19/2075602/hatem-buys-west-raleigh-catering.html)

    Tax money doesn't need to be subsidizing rich people.

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