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Take time with village loan to business

The Saranac Lake Village Board of Trustees should take its time and listen hard to its taxpayers before committing them to loaning $200,000 to transform the long-closed Dew Drop Inn into a functional restaurant and bar.

Dew Drop’s was a local favorite, and there certainly is widespread public interest in making that property productive again. We applaud Calli Shelton and Randy Coles for managing to buy the decrepit but well-located downtown building. Others had tried and failed to come to terms with prior owner Ed Dukett.

We also like Ms. Shelton and Mr. Coles’ design plan for a restaurant eponymously called 27 Broadway and a bar called Bootlegger’s, a hat tip to the area’s 1920s rum-running past. And we love their idea of having the village reroute the River Walk through their deck, as with San Antonio’s famous River Walk in the couple’s recent home state of Texas. Currently, Saranac Lake’s River Walk leaves the river to avoid the Dew Drop building, detouring through an alley. It belongs on the water.

The village government has already been more involved in this process than is normal for a private business deal, but up to now, we thought that was appropriate. The River Walk belongs to the village, for one thing. Plus, the village, in its code enforcement role, was enmeshed in the seven-month transaction since the property had been cited for code violations. Those especially matter in Mr. Dukett’s case because he agreed years ago to not sell any of his rental properties until they are all up to code. That deal settled a lawsuit brought by the family of a teenage boy who died in a fire in one of Mr. Dukett’s rental houses. With village officials involved in the negotiation, Mr. Schlitt agreed to waive the mortgage for the Dew Drop deal.

On Monday, the village board will consider loaning Ms. Shelton and Mr. Coles $200,000 to “undertake demolition, stabilization work and interior improvements at 27 Broadway,” the resolution states. The money would come from a revolving loan fund the village maintains to finance business, housing and other community development projects. Adirondack Economic Development Corporation manages revolving loan portfolios for several North Country municipalities, including the villages of Saranac Lake and Lake Placid.

Normally, a bank would take on the risk and reward of a business improvement loan. What is this project’s status with banks? Also, did Saranac Lake’s revolving loan fund come from local taxpayers or outside? The village public needs answers to to these questions before taking on a bank’s role.

Lake Placid started its fund in the 1990s after U.S. Housing and Urban Development gave the village money to lend to the Mirror Lake Inn, to help it rebuild from a severe fire. That worked — the inn paid the money back and contributes greatly to the village economy, life and tax base — but it doesn’t always work so well. For instance, Event Sound defaulted on a $150,000 loan from Lake Placid in 2007, and National Sports Academy folded after getting a $200,000 loan in 2013.

These funds can do good but are tricky.

We appreciate that a renovation on 27 Broadway’s scale is terribly expensive and that the village public as a whole stands to benefit. Nevertheless, when a business turns to the government for financial aid, it needs to be fully aired in public. People need to see their elected officials ascertain the risk accurately, solicit public feedback, take their time and be wary.

Therefore, we think it would be best if the village board puts off making a decision on this matter until its next meeting.

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