Agency forecloses on Surfside site

The authority board recently directed the Del Norte Economic Development Corporation that administers the loans for the Tri-Agency to initiate the foreclosure process, Renfroe said.

The 10,720-square-foot property will be up for auction today at Del Norte Realty, 550 H St., for $82,638.20. But that is only a piece of the debt owed on the property, including interest and foreclosure fees.

The SBA is in first position for money owed and the Tri-Agency is second and third position for each of the two loans.

Foreclosing from Tri-Agency’s third position as a lender keeps the SBA and authority in first and second positions, which provides an opportunity for the SBA and the authority to regain the money they lent, Renfroe explained.

Anyone who can pay cash today will be an owner alongside SBA and Tri-Agency, which is a joint powers agreement among the city, county and harbor. 

If that person wanted to buy the property outright, he or she would have to make an acceptable offer to SBA and Tri-Agency, who are still in first and second position to own the property.

Several years ago, Tri-Agency approved two loans to the Cowans: one for furniture, fixtures and equipment and one for turning the old brewery into retail shops, Renfroe said.

The SBA loan was assumed from the previous owners when the property was bought, he said.

In addition, the Cowans received a $34,000 grant for lighting and landscaping from the Crescent City Redevelopment Agency.

The property has “essentially been out of service for three years and it’s not going anywhere,” Renfroe said.

“Our intent is to try and get (the property) back into productive service and create jobs,” Renfroe said. “That’s the goal here.”

Lori Cowan,  a real estate agent with RE/MAX Coastal Redwoods, declined to speak specifically about the foreclosure, except to say that the business is closed and the property is for sale.

The real estate market is down in Crescent City and nationwide, she noted.

After the auction today, Renfroe said he is going to try to find a buyer for the property “to bring this thing back to life.”  A price would have to be negotiated between all the new property owners, he said.

The commercial property has “huge potential,” he said, due to the impending completion of the nearby Wastewater Treatment Plant expansion, which means less odor in the area; the city’s plans to renovate Front Street; the possibility of expanding the North Coast Marine Mammal Center in Beachfront Park; and the presence of the Hampton Inn and Suites just down the road.

Businesses at 400 Front St. have a history of being part of the plan for downtown Crescent City’s economic revitalization, but also of financial struggles.

Before Surfside Grill, Jefferson State Brewery brewed beer and served food there.

It closed in May 2000 due to insurmountable debt, according to an article in The Triplicate, which detailed how the owners had borrowed more than $2 million from a bank, the Small Business Administration, the county, the city, and the Tri-Agency.

The Cowans bought the building and property in 2002 and opened the Surfside Grill and Brewery.

Around 2005, the Cowans planned to construct retail shops and borrowed money from the Tri-Agency to help with the renovation. However, this plan had yet to  come to fruition when the restaurant closed in 2008.