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A $200,000 jump start

Village board approves loan to former Dew Drop Inn

The new owners of the former Dew Drop Inn at 27 Broadway in Saranac Lake received $198,000 for renovations on the former Dew Drop Inn in Saranac Lake to establish a “food experience” business consisting of a restaurant, bar, apartments, event space and cooking school as part of the state's economic development grants, announced Wednesday. The company will also gain $300,000 via the Saranac Lake Local Development Corporation, and another $140,000 through an Empire State Development grant for tourism. (Enterprise photo — Chris Knight)

SARANAC LAKE — A $200,000 economic development loan from the village will help jump-start key upgrades to the former Dew Drop Inn as its new owners await word on grant funding they’re seeking from the state.

The village Board of Trustees voted 4-0 Monday night to approve the loan to Chicota Inc., a company formed by Randy Coles and Calli Shelton. The Texas couple purchased the Dew Drop earlier this year and plan to renovate and reopen it as a restaurant called 27 Broadway, its street address downtown, and a bar called Bootlegger’s.

After the vote, Shelton said the loan will allow for interior demolition and basic infrastructure work — plumbing, heating and electrical improvements — to take place in the building.

“Those things have to be done no matter what happens as far as the rest of the project goes,” Shelton said. “It’s helping us take advantage of this time that we have to get started.”

Over the last few months, Shelton said the project has been caught in a holding pattern. She doesn’t know yet whether the state has approved a Main Street grant request for the project that was submitted by the Saranac Lake Local Development Corporation. The LDC is seeking $500,000 for facade renovation and other construction at 27 Broadway.

Village of Saranac Lake Community Development Director Jeremy Evans talks about a $200,000 village loan to the new owners of the former Dew Drop Inn at Monday night's village board meeting. (Enterprise photo -- Chris Knight)

“(The loan) gives us time because we’re caught in this situation where we’re waiting on the notification of the grant, which any of the lenders we’ve been talking to want to have in place,” Shelton said. “They want to know if we got the grant, and how much we’re getting, before they will lend us a dime. We could be doing work right now that needs to be done no matter what happens to the project, whether we get the grant or not.”

Now that work will be able to happen, courtesy of the $200,000 infusion from the village. The short-term loan has to be paid back in a year at 1 percent interest, village Community Development Director Jeremy Evans explained to the board. He said the agreement allows for a potential six-month extension, depending on how the project schedule plays out.

The money comes from a Community Development fund that’s financed other projects in the past, Evans said.

“The source of that money is from clawbacks and repayments on housing grants and housing loans from various (Community Development Block) grants the village has received over a long time,” Evans said.

“So it’s not village taxpayer funds?” asked Trustee Paul Van Cott.

C. Shelton

“Correct,” Evans said.

Asked by Trustee Rich Shapiro about the amount of security Chicota Inc. has put up for the loan, Evans said they have a personal guarantee from Shelton and Coles, and they’ve also named 27 Broadway and another property they own in the village as collateral.

Van Cott, who chairs the LDC, called the loan “a fantastic investment.” He said the LDC reviewed Shelton’s business plan and application before submitting the grant request to the state.

“We see this as a significant opportunity for downtown revitalization, with potential employment in the neighborhood of 20 to 30 new jobs in downtown Saranac Lake,” Van Cott said.

Trustee Allie Pelletieri said he was “all in” for the loan, but suggested a $2,000 payment to the Adirondack Economic Development Corporation, which reviewed the loan for the village and recommended its approval, should be made at the end of the process instead of now. Evans said he’d look into it.

The new owners of the former Dew Drop Inn at 27 Broadway in Saranac Lake got a boost Monday as the village OK’d a $200,000 economic development loan to pay for interior demolition and basic infrastructure work. (Enterprise photo — Chris Knight)

Shelton posted a “thank you” to the village board on the Dew Drop Inn’s Facebook page after Monday’s meeting. Work will start soon, she said.

The LDC’s $500,000 request for 27 Broadway wasn’t selected as one of the North Country Regional Development Council’s priority projects for state funding this year — the priority projects were announced last month — but the regional council named it as a project supporting the state’s downtown revitalization agenda. The state REDC awards will be announced next month in Albany.

What happens if the LDC doesn’t win the grant for the former Dew Drop?

“It’ certainly changes the plan,” Shelton said. “It will probably extend the timeline greatly. Instead of the year-and-a-half or two years we’re hoping for, maybe it’s five years until the entire building is refurbished and functioning as business space.”

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