A Troy loan review committee voted Tuesday to recommend Troy City Council allow the owners of The Caroline restaurant to assume a city loan first approved in 2007 as part of the owners' effort to purchase the historic Dye Building downtown.
The restaurant owned by Steve and Melanie Smith is located on the first floor of the building on the southeast corner of the Public Square. Medallion Investments, LLC, received the city loan for $380,000 to help buy the 1850s building in 2007.
The loan is in default with the most recent payment made in May 2016, Jim Dando, city development director and loan officer for the Community Development Block Grant program, told the loan committee. The loan program was funded with a federal grant.
The sale of the building would include Medallion Investments paying the city $27,500 in overdue loan payments, interest and penalties.
The Smiths would assume payments on the $296,000 remaining on the city program loan. The committee recommended a 30-year loan payment after a two-year period of interest-only payments.
Steve Smith outlined for the committee plans to buy the building, with funding through a bank loan, and to lease two offices on the second floor. Two other offices on that floor are occupied. He plans to move forward with conversion of the third floor into two or three condos. The condo project was started but not completed and has been the subject of a lawsuit. The lawsuit would be resolved as part of the sale package, the committee was told.
Smith said he wants to move forward with completing building improvements as soon as possible.
"With everything coming to Troy, we want to be a part of that. We don't want to leave the third floor linger," he said.
John Frigge, city auditor, asked Smith several questions about plans and finances.
“I am confident I will get it done and be able to make it happen,” Smith said.
Tom Kendall, a city councilman and member of the loan committee, said the Dye Building is a downtown anchor. He said he would have preferred a more detailed business plan.
"We want to see Steve and Melanie be successful," Kendall said.
City council will be asked to approve the loan changes as an emergency action to accommodate a closing on the purchase Oct. 4. A council committee will meet to make a recommendation on the request to the full council. That meeting will be held at 4:15 p.m. Thursday at Troy City Hall.