West Allis - The Farmers Wife restaurant was approved for a start up loan that could reach $65,760 by the West Allis Common Council last week.
Much of it will be forgiven if the new restaurant keeps up with its loan interest payments for five years. The business is a farm to table restaurant at 6533 W. Mitchell St. The restaurant will hold a grand opening on Sept. 30
Of the total loan, $50,000 would be in federal community development block grant dollars. The federal government provides CDBG grants for job creation and for economic development, said Patrick Schloss, community development manager.
The restaurant is on the edge of the city's Six Points development area and is near the National Avenue development corridor, he said. If the restaurant keeps up with interest payments on the CDBG loan, 20 percent of it will be forgiven each year until the principle is gone, Schloss said.
The remaining $15,750 of the total is a city economic development loan that would have to be paid back with interest over five years. The restaurant is in the city's special taxing unit number seven, so the city has already targeted the area for redevelopment, he said.
"We want to promote entrepreneurship in the city," he said.
While most entrepreneurs get startup loans from banks, those wanting to open restaurants have a harder time, Schloss said.
"Restaurants are very hard to finance," he said. That's because nationally, so many restaurants fail, he said.
West Allis, however, has several success stories, such as West Allis Cheese and Sausage, Kegels Inn and Butch's Pub and Eatery, he said.
"West Allis is becoming a destination," Schloss said.
The city is ready to step in to help restaurants as well as other businesses with strong business plans, he said. It has a loan committee including two bankers that goes over every application, judging the strength of the proposed business, he said.
"We can get more businesses established and believe we can grow our city that way," Schloss said.
If they are judged to be sound, the loan requests go to the common council for approval.
The Farmers Wife proposal was approved unanimously.
"It's what we want in our city," said Alderman Kevin Haass, chairman of the administration and finance committee that recommended approving the funding. "Farm to table is popular nationally."
Using federal CDBG money is appropriate, he said.
"It's what the block grant money is for," he said. "To go to improvement programs and to be a momentum shifter."
It is a disadvantaged neighborhood and the city is wise to invest in improving it, he said.
The area has a lot of potential to support a new business, Schloss said. About 183,000 people live around it, he said. "It's a great location to be opening a business," Schloss said.