July 24, 2013 at 7:07 pm
By Christopher Goins
The Board of Public Works kicked a $240,000 loan to renovate and expand a popular sports bar franchise down the road on Wednesday.
The board will instead decide whether to grant the economic development loan, which is 27% of total project costs, to the Towson Greene Turtle on York Road at the next Board of Public Works meeting on Aug. 21.
Officials demand justification for use of state funds
When asked by State Treasurer Nancy Kopp why the loan is important enough to receive public funds, Department of Housing and Community Development Assistant Secretary Carol Gilbert said that the restaurant is “expanding and doubling in size to serve the Towson area.” In other words, the loan will create jobs and it will contribute to the “revitalization” of the Towson neighborhood.
Gilbert said DHCD thinks the loan is a “terrific economic development project.”
Gov. Martin O’Malley asked whether Towson has been struggling. Gilbert replied: “It has and it may struggle more in terms of, because of, new national chains coming in with the new Towson Circle III development.” She added that DHCD is interested in “investing” in locally-owned businesses “that are a part of the traditional business district.”
“If the argument is ‘other things are coming in and growing and so we want to help this one company,’ it sounds to me like there’s revitalization going on without it,” Kopp said.
U.S. Census data shows that from 2005 to 2011, the number of establishments in the 21204 ZIP code where the Towson restaurant is listed have continuously declined — since before the start of the recession in December 2007–by 261 establishments. The number of employees has also declined by 4,157 over the same period. Data for 2012 and 2013 are not available yet.
The area includes the largely vacant Towson Commons.
Baltimore County is backing project
Baltimore County has given the Greene Turtle project a $90,000 grant out of the total estimated $893,000 costs.
An applicant for a loan within the Neighborhood Business Development Program must have looked at other sources such as the local community, banks, and plan to self-finance at least 5% of total project costs. According to the Board of Public Works request, the borrower has put in $160,000 or 18% of project costs.
The Neighborhood Business Works loan will go towards a second dining room on the rooftop and new furniture. State guidelines limit the loan to up to 50% of project costs.
“I’ve visited a lot of these Greene Turtles,” said Comptroller Peter Franchot. “This one is a sports bar in a college town.” Later he added it was an “affluent” town.
Franchot against loan
Franchot indicated he was a clear “no” vote if they had actually voted on the loan. He said the idea of giving Greene Turtle money reminded him of when the state gave money towards a Popeye’s chicken location on Route 50 in Cambridge, Md. in 2013 and a hotel chain.
“If they can’t make a go of it without taxpayers money nobody can,” said Franchot.
The Greene Turtle has 24 locations in Maryland, seven locations in Virginia, three in Delaware and one in the District of Columbia and New York each, according to its website. It got its start in Ocean City, Md. in 1976. According to the Jacksonville Daily Record, the franchise expects to have 150 restaurants on the East Coast within five years.
“They are not struggling,” said Franchot.
Expansion could more than double full-time employees
The Towson location has 24 full-time employees. Gilbert claims that if they are allowed to expand they will create an additional 27 full-time employees.
Although the Towson location is a healthy business in term of sales, Gilbert said construction financing is hard to get.
“I would love to see some numbers attached to the expectations [and] to the payback,” Kopp said. The board voted to defer discussion on the loan until the August meeting.
Three months ago, the Board of Public Works approved a $300,000 refinancing loan from the same revitalization program for an Irish pub in Wheaton.