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“I was very unaware of the bill,” she said. “The city has been wonderful and I feel like we will do a wonderful job of bringing jobs to the city and help change people’s lives. There are people who are really depending on me and my family with this expansion.”
Under the proposed deal with the city, the Rogers will have to invest at least $50,000 into the restaurant’s interior space before they can access city dollars. The couple is personally guaranteeing the loan, which will be secured with the mortgage on their Hamilton restaurant as well as life insurance policies that list the city as the beneficiary to the extent of covering the remaining loan balance.
The loan is to be paid back over 10 years and carries an interest rate at the prime rate plus 1 percent, and will be locked in once the deal is official. The prime rate has hovered around 3.25 percent.
William Fischer, Cincinnati’s interim economic development director, said Tuesday that because development and retail build-out costs at The Banks are “extremely expensive,” the only way to attract small, minority-owned businesses like Mahogany’s is to provide a grant and loan. Attracting businesses like Mahogany’s fits with The Banks developers’ vision to create mix of of locally owned restaurants and first-to-Cincinnati national chains.
Mahogany’s is the second retailer at The Banks to benefit from a deal financed by the city. In 2010, the city and Hamilton County approved a loan for $5.5 million to The Banks developers Atlanta-based Carter and The Dawson Co. At the time, developers said the loan was needed to cover interior build-out costs that would help lure a high-profile tenant to the development, later revealed to be Toby Keith’s I Love this Bar Grill.
That loan, which was split 50-50 by the city and county, is secured by a third mortgage on the property. The mortgage is in line behind a $40 million bank loan and $10 million loan from the Cincinnati Equity Fund. That means if the developer defaults on any piece of its financing, the city loan is last in line to be recouped.
Smitherman questions why the loan to Mahogany’s was handled differently from the loan granted to The Banks developers.
“I haven’t gotten clarity on why there are differences, and why we don’t have the same kind of clawbacks with the Toby Keith loan,” he said. “To me, it looks like it has to do with money and power. Just because someone might be a big player, doesn’t mean they can’t go bankrupt.”
Toby Keith’s opened this month, joining Holy Grail Tavern Grille and Johnny Rockets as the first retailers to open at the waterfront community.
In addition to Mahogany’s, at least three other restaurant and entertainment venues are scheduled to open this year, including Tin Roof, Crave and The Wine Guy Bistro.
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