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Council turns down loan requests for eatery, showroom

October 06, 2009|By ANDREW SCHOTZ

HAGERSTOWN -- Months of uncertainty ended Tuesday when the Hagerstown City Council rejected two loan applications for a proposed restaurant and classic-car showroom.

After three executive sessions on the topic in recent weeks, the council turned down Our Three Sons LLC's requests: $161,000 from the Hagerstown Revolving Loan Fund and $101,000 from the Upper Floor Revolving Fund.

Tim Gordon, a principal in Our Three Sons, has said he needs a loan of at least $100,000 to open the showroom and the car-themed restaurant at 116 N. Potomac St. The money would fill a gap in private funding, he said, and would pay for an elevator and a sprinkler system.

After Tuesday's votes, Gordon said city officials were guilty of "petty politics" and broken promises, so he'll try for more private investment.

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Council members William M. Breichner, Martin E. Brubaker, Forrest Easton and Ashley C. Haywood voted 4-0 to follow the Hagerstown Redevelopment Authority's Aug. 19 recommendation to reject both applications.

Councilman Lewis C. Metzner was absent.

The HRA decides loan requests up to $100,000 and makes recommendations to the council for larger requests. It has denied other Our Three Sons requests.

In August, after the HRA recommended denying the new applications, Gordon said "a bunch of conservative banker types" were uncomfortable with his approach: using $310,000 in federal and state tax credits as collateral.

After Tuesday's special meeting, Breichner said the council agreed with the HRA that "it was not a good business plan."

"There was no overwhelming evidence that changed since this was taken to HRA," Easton said.

Mayor Robert E. Bruchey II said he promised Gordon his application would be considered, not that he'd get a loan.

Easton called the application approval process "completely flawed."

Giving the council final say instead of the financially savvy HRA makes it "nothing but a political process," with people on both sides lobbying council members, he said.

Robert L. Orndorff Inc. of Smithsburg filed for a mechanic's lien against Our Three Sons in August, seeking $18,659.96, but the lien has been satisfied, according to court records.

A foreclosure auction for a house Gordon and his wife own was canceled last month after a payment was made. Gordon has said that debt is not connected to his project.

In November 2007, the city loaned Our Three Sons $100,000 to rehabilitate 110 N. Potomac St., which is connected to 116 N. Potomac St. As of Tuesday, the balance was $95,978.

Last month, R.J. Fennel Inc. filed court papers seeking $2,200 that Our Three Sons owes. Gordon said that was for an appraisal the city made him get.

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