Railroad Street Steakhouse in Roseboro has been officially approved for a $77,000 revolving loan that will bring renovations and an expansion to the establishment, including the addition of an upscale sports bar.
Some concerns were raised that the loan would deplete the revolving loan fund, however the request ultimately received unanimous approval from the Sampson County Board of Commissioners this week.
The Sampson County Revolving Loan Program Committee requested county commissioners approve the loan to Railroad Street Steakhouse allowing owners Richard and Laura Barefoot to renovate the restaurant and adjacent building, as well as purchase new equipment. The Barefoots own both the 2,880 square foot existing restaurant building, as well as an adjacent 1,352 square foot building, which would become an upscale bar.
The request was tabled at the Board of Commissioners’ June 4 meeting, with additional paperwork on the application requested by Commissioner Albert Kirby. That paperwork was given to board members during budget deliberations and John Swope, executive director of the Sampson County Economic Development Commission, spoke again to the matter at Monday’s meeting.
Kirby inquired as to how much people actually know about the loan program and availability of funding to small businesses locally, and whether it is publicized.
“We try to promote it as much as we can,” said Swope. “We don’t have a lot of opportunity as far as advertising, but I do speak about it when I have opportunities to speak at civic clubs or church organizations when I’m invited, and at our annual Small Business Assistance Forum. We do have limited opportunities to get the word out.”
Kirby asked whether there was a mechanism to approve a majority of the loan, but leave some in the fund for other businesses to potentially take advantage if interested. If that potential business did not go through with the “rigors of the application process” or were not approved, then that money could still go to Railroad Street Steakhouse, he noted.
Kirby said City Councilwoman Maxine Harris and her husband own a business in downtown Clinton and she indicated to him that she was in need of funds and knew nothing about the program. Kirby said he wanted to accommodate Harris, or any others, who might want to apply for funds.
“If Railroad Street uses this amount then they will deplete the reserve,” said Kirby. “I’m just a little concerned that one business would basically deplete the funds when another is telling me that they would want it. They’ve been in business right at 40 years and I couldn’t agree to actually vote to deplete the resources of this program. I don’t know whether or not she would be approved or what the outcome would be, but I would be for reserving enough money — maybe take $5,000 or $10,000 off what is being requested (by the steakhouse) — to hold and see whether or not she comes forward to ask for any money.”
Swope said there are other programs available through the N.C. Rural Center to small businesses for those interested, and he could work with any interested businesses. Kirby asked whether it was possible to cut the amount and delay the matter a week or two to see whether another applicant comes forward.
“I would think from my years of lending experience that if you have an applicant that has a particular application on the table for ‘x’ dollars that it would be the more appropriate thing to act on it,” said county manager Ed Causey, “because you might decide that you want to turn that (other) application down.”
Swope said any modification to the loan would have to go through Railroad Street Steakhouse and the proprietors there, to see if reducing the loan amount would still fit their needs and plans.
With the proposed project, a 30-foot corridor would be built to connect the two buildings and would include new restroom facilities serving both the restaurant and the bar. With the new corridor and remodeling, the total square footage will grow to 4,232 square feet. The sports bar would include 700 feet of covered patio for outdoor dining and additional entertainment space.
Like the business itself, the employment is expected to grow from 10 part-timers to 6 full-time and 11 part-time employees, with an annual payroll of around $90,000 for the full-time employees, according to Swope. Opened in October 2010, the Railroad Street Steakhouse has grown its income by 26 percent since January 2011. Swope said the restaurant has fast built a reputation as a nice family business, and its expansion could go a long way toward filling a void in the tax base.
Railroad Street Steakhouse would be just the second participant in the local revolving loan program. The Sampson County Revolving Loan Program began in 2007 with $80,000 in grant funds from the N.C. Office of U.S. Department of Agriculture loaned to Warren Eye Care. The USDA program allows for those grant funds to be recycled, with interest, for re-lending to other small businesses in the future as they are repaid.
The goals of the loan program are to help small start-up or existing business in Sampson County and build the program.
As of the end of June, more than $83,000 of the first loan’s principal and interest had been paid back into the loan program fund, opening those funds up to another participant. The Railroad Street Steakhouse has been awarded a $48,000 grant from the Building Reuse Program of the N.C. Rural Economic Development Center. Those funds will be used with the loan to offset the $123,000 in total remodeling costs for the expansion.
“The purpose of the program is to assist businesses in our local area for needs,” said Kirby. “From my perspective, to give one business all the funds that are in it, to the exclusion of another, that would seem to defeat the purpose of the whole program. I’m in a tough situation here. I think the world of the proprietors of the steakhouse, I eat there all the time. I want to go forward with the steakhouse. I just don’t think it’s fair to deplete the whole amount to one business when another is saying ‘I want to do it.’ That troubles me. We’re supposed to help all Sampson County businesses.”
Swope said the funds will not necessarily be depleted.
The loan has a five-year payback schedule, at an interest rate of 4 percent. The loan being paid back by Warren Eye Center, currently totaling $83,000, will grow to $92,240 by the end of the year once fully repaid with interest. The $77,000 loan for Railroad Street Steakhouse is actually about $75,500, because estimated closing costs will be closer to $500 than $2,000, as Swope initially projected.
With money still to come in, coupled with the reduced loan amount, there will be between $17,000 and $18,000 still in the fund. Kirby said he was satisfied with that.
“We want more businesses, and want to help,” said Commissioner Jefferson Strickland, urging further publicizing of the revolving loan program and more communication between businesses that need help and the county that can offer it. “Let’s assist them in any way we can, and move that forward through other avenues.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at firstname.lastname@example.org.