Dunkirk council considers loan (05/16/06)

DUNKIRK — Criteria regarding the issuance of Downtown Revitalization Loans sparked a lengthy discussion dealing with the pros and cons of starting a new business during a special council session here Monday evening.

No definite decisions were made, however, as council members expressed concerns about potential financial risks to the city and the loan applicant.

Prospective first-time business owner Dianna Baugher of Redkey said she was interested in obtaining either a low-interest or no-interest loan from the city to get her tanning salon and gift shop business started, during the hour-long session.

Mayor Sam Hubbard explained that the city had a Downtown Revitalization Fund but there were restrictions on how the money could be spent. After reviewing information supplied by Baugher, Hubbard said that her proposal could possibly qualify for a no-interest loan of $6,000 if she was willing to put up another $6,000 of her own money, or a $6,000 loan with a four percent interest rate, if other stipulations were met.

Baugher said she would like to start the new business at 126 S. Main St. She plans to have a gift shop with candles as well as the tanning beds.

Baugher said she intends to purchase used tanning beds from Sunsational Dreams at 132 S. Main St, Dunkirk.

Sunsational Dreams owner Debra (Clawson) VanSkyock was not present at Monday evening’s council session, but afterwards during an interview at her business, she said she plans to keep her tanning salon open at its present location. VanSkyock said she had talked with Baugher about the possibility of selling tanning beds to her, but her intention was to buy new tanning beds and remain open at her downtown location whether the new business opened or not.

“If she (Baugher) wants to go into business, I’ll sell her the beds, but I’m going to continue my tanning business,” VanSkyock said Monday night.

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Earlier at Monday’s meeting, Baugher explained that while she was only going to rent the 126 S. Main St. location, improvements to the building were needed. Baugher said she intended to have these improvements made at her own expense, and council members asked if she had any agreement in writing from the building’s owner that he would not sell the building without at least allowing her to make an offer first.

Council members suggested that perhaps she should try to initiate some sort of lease-purchase contract agreement to acquire the building. Councilman Tom Johnson said that otherwise, she might spend a lot of money on improvements and then have “the building sold out from under her.”

Other council members also offered advice on starting up a new business, and following further discussion, Hubbard said, “To be real frank with you, I and (councilman) Jim Doughty have been in business. Normally, when you go into business, you put up a big chunk of your own money. Here you’re asking the city to put up money.”

Doughty also questioned the amount of risk which the city would be taking.

In summary Baugher said, “I’m running up against a lot of ifs.” She said she would consider her options further and get back to the council. “I appreciate your time,” she added.[[In-content Ad]]