EDIT loan request tabled

A local firm asked for help Monday toward turning a former motel into an apartment complex.

A representative from Riya Hospitality asked the Portland Economic Development Income Tax (EDIT) Advisory Committee for a $219,573 loan Monday to help with extending a sewer line to the former Budget Inn.

Paresh Patel of Riya explained that his firm bought the property at 1411 N. U.S. 27 just north of Portland’s city limits in January and has since remodeled all 22 rooms. The firm plans to shift the facility from a motel to furnished apartments.

Patel explained that the septic system that was used at the hotel in the past is no longer viable. Riya explored the possibility of running city water to the site as well, but that the cost was prohibitive. It will instead continue to use the existing well.

The total cost of the project, including property purchase, renovations and the sewage line, is $383,000.

Committee members Kent McClung and Janet Powers both expressed concern about the ratio of the loan being requested in comparison to the amount invested by the owners. Riya has invested about $164,000 in the property thus far.

“I pause at a ratio where we’re putting more in than the investor,” said McClung.

They said they would be more comfortable at about the 25% level, which is at the same level at which loans were granted to Wheel & Spoke Antique Mall and Reclaiming Design earlier this month.

At that ratio, Richards said, a similar loan would be about $96,000.

Following a question from McClung, Richards said the city’s EDIT loan program allows for loans for between $15,000 and $200,000.

McClung also expressed hesitancy for such a large loan since the property sits outside city limits.

“I know the benefit to Portland would be good, but it’s also a tax base that is outside of our jurisdiction,” said McClung. “And so any investment we make, we’re not really going to recoup through property taxes.”

Richards suggested that the city could look at partnering with the county on loans for the project.

Committee members agreed it would be a good idea to look into whether the county would be willing to contribute toward the project as well. They ultimately voted to table the request in order to gather more information from Riya and to talk with county officials.