Clarion pays back DLDC loan

The money has been paid back. That was the word Wednesday about a $125,000 loan that the Dunkirk Local Development Corporation made in 2009 to the Clarion Hotel.

The DLDC board of directors learned the news during its annual meeting. Development Director Steve Neratko told the board the DLDC now has $140,000 in CDBG-R funds with the Dec. 31 Clarion payment.

“It’s CDBG-R, so we are still looking into seeing what can be accomplished with those funds,” Neratko explained. “We’re waiting for them.”

Board member James Muscato asked if the Clarion was all paid up and was told ‘yes.’

“We drew up a new set of loan paperwork as they were restructuring their financial situation, merging their properties. They had enough money just to pay off what was left over on their DLDC loan, they decided to do that,” Neratko explained. “They don’t owe us anything at this point. They are clear.”

“Can you make sure the public is aware of that so we don’t keep on hearing all this stuff about not doing our job?” Muscato asked.

“We will. At the next meeting there will be a resolution for the two loans that have finished their payments. There will be resolutions just confirming that with the board,” Neratko replied.

Lakeshore Grill Works has also completed payment on its loan while G & E Tents has one loan payment left.

Councilwoman-at-Large Stephanie Kiyak questioned the lack of payment from Enviroteknix, which made one payment and then has stopped.

“We have continued to try to make contact with them and their attorneys and have not really gotten anywhere,” Neratko stated.

Mayor Anthony J. Dolce added City Attorney Ron Szot has reached out to Enviroteknix and will try again.

Muscato asked if anything was happening with the former Dunkirk Metals’ Deer Street property.

“Not really, the company is no longer in business. The DMP, the Dunkirk Metal Products that exists today is a new company. It is new owners, they didn’t receive any of the debt with the old company,” Neratko replied. “It is a brand-new company. So as of right now we are still looking into what is possible, but at some point in the future we are going to have to start making some decisions. Like Peyins Deli, we know we have not been able to reach them. At this point there is no way to contact them; as far as we know, they’re no longer in the area.

“At some point we’re going to have to decide what to do.”

Dunkirk Metal Products owed the DLDC $98,072 while Peyins Deli owed $6,354. Dunkirk Metals has closed its Deer Street facility as the Chautauqua County Industrial Development Agency brokered a deal allowing DMP to consolidate its Dunkirk and Brocton facilities in a Sheridan location last year.

Neratko said the Peyin building was sold.

“It’s completely owned by a different person at this point. Our auditors, we have been talking to them about this issue because they would like to see, they know we’ve been trying to make an effort to reach out to these people,” Neratko stated. “They understand that it is probably going to be an account that we’re not going to be able to pay on, so at some point we should look into either writing it off or something. We’re in contact with them … possibly at the next meeting we’ll have to make a decision on that one at least. … We’ll touch base at the next meeting on it.”

Muscato asked about loans to SUNY Fredonia Technology Incubator companies Henlie, Selling Hive and Textivia.

“There was money lent to them, they were loans that were convertible into grants dependent on a certain amount of jobs being produced. … The issue is Henlie and Selling Hive, it doesn’t appear that they’re in business any longer,” Neratko replied. “Each of them has a separate issue. Again, it’s something that we’re working on trying to figure out exactly what is possible, what we can do.

“Textivia is still in business, they’re in business just down the street. They also have a branch in Raleigh N.C., they are actually very successful right now. They’re really moving along. I believe they begin payment in either November or December of this year, they’ve been willing to work with us. That one I don’t think will be an issue.”

Selling Hive received $30,000 and Henlie $15,000 from the DLDC.

“Henlie asked for an additional $15,000 more than a year ago but was turned down by the DLDC and has been unable to find funding elsewhere,” Neratko explained. “Right now they’re kind of in a holding pattern. Selling Hive, the owners actually split. One of them moved back to California, the other one is still in the area. We’re looking into the options on that one.”

After the meeting Dolce said the Clarion payback made the hotel free and clear of city-related debt.

“A few months back the Clarion’s attorney and our attorney came to an agreement that the DLDC approved and recently when they refinanced, with part of that refinancing they paid off their DLDC loans,” the mayor explained. “Right now we have that money sitting in a HUD account and we’re just waiting on direction from HUD on what we are to do with it. It’s in a HUD account and it will sit there until otherwise directed.”

The DLDC board of directors is scheduled to meet again Feb. 26.

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