The Economic Development Authority (EDA) in Winnebago is finding out that lending money can be risky business.
EDA board members could be left holding the bag on a couple of loans totaling more than $63,000 to open two restaurants.
Late last year, the EDA approved a $60,000 loan for Fredonia & Luella’s Seafood Restaurant to be located at the former Tasty Treatz site on South Main Street.
For more than six months a sign in front of the building touted that seafood would be “coming soon” to the city.
A website says the restaurant will serve authentic Louisiana foods and the freshest Louisiana seafood.
City Administrator Chris Ziegler told EDA board members at their Wednesday meeting he recently spoke with the owner and was assured he was still planning to open.
EDA board member Doug Hill has run out of patience and says something needs to be done.
“I’m not sure they really had any intention of doing anything. We would have heard something by now,” says Hill. “I recommend we start the process to collect our loan. The sooner the better.”
Balance of the Fredonia loan is $57,279 and it is past due. The last payment was made on July 8.
While Cuquita’s Tex Mex restaurant on Main Street hasn’t been open for the past several weeks, Ziegler says the loan is current.
Ziegler says he hasn’t been able to talk with the owners to see what the intend to do, but they are making their monthly payment of nearly $189. Balance on the original loan of $10,000 is slightly more than $6,000.
Despite the two loans, there is some good news regarding eight others with a total outstanding balance of $149,310. Seven of them are current, while one is in forbearance and the EDA is not requiring any payment at this time.
On the commercial side, however, there are four loans totaling $25,634 and only one is in current status.
Payments have been made on two loans but they still remain past due, while no payment on a loan for $9,289 has been made since last March.