Loan means tsunami repairs can proceed
The Crescent City Harbor District’s tsunami-related cash concerns have been relieved thanks to approval of a $5.4 million loan from the U.S. Department of Agriculture.
“It’s been the number one worry for us; we need to have enough money to finish this project and now we do,” said Harbormaster Richard Young.
The loan will not be finalized for about a month, but the harbor staff got word late last week that its application had been approved.
“USDA folks have been really great to work with,” Young said.
The loan will cover all the money that the harbor has expended for Phase 1 of the inner boat basin reconstruction project (including dredging and temporary docks) and the harbor’s share of repair costs for the remaining repairs related to tsunami damage (including outer basin dredging).
The money will also be used to pay off a loan from the Department of Boating and Waterways, consolidating the district’s long-term loans.
“This will be the only long-term debt the harbor has,” Young said during Tuesday’s Harbor Commission meeting.
The district has a short-term loan with Rural Community Assistance Corporation that will be used as “bridge funding” to pay contractors on time when there are delays in dispersed funds. It will also help cover payments from the California Emergency Management Agency, which retains 10 percent of its funding until the project is complete. That loan will be paid off in its entirety when Cal EMA pays the retained 10 percent.
Now all the harbor has to do is make the payments. For the first two years, only interest payments are required, which fall just under $190,000 a year.
“For the first two years it’s $113,000 more than what we were paying (for the Boating and Waterways loan),” said Harbor Commissioner Scott Feller. “That’s not bad. I can stomach that one.”
Upon receipt of the USDA loan, the harbor will be able to commence outer boat basin dredging.
The loan carries a 3.5 percent interest rate over 40 years. Payments will increase to roughly $286,000 annually for 10 years after the first two years, and then payments will be roughly $360,000 annually for the remaining 28 years.
“We absolutely have to enhance the harbor’s revenue in order to survive. I think we’ve all known that for some time,” Young told the commission. “This harbor can’t survive on the existing revenue. It has to be enhanced if it’s going to be maintained and improved.”
During Tuesday’s meeting, the Harbor Commission approved paying up to $45,000 for repairs to the former Bistro Gardens restaurant building, which is expected to soon house a new restaurant, Porcini.
Termites were recently discovered in the walls and exterminated.
“In the course of exploring the termite damage, some other problems with the building appeared, so in order to put the building into reasonable shape so the new restaurant can operate there, it requires these repairs,” Young told the commission.
Much of the disrepair wasn’t visible until the walls were torn out, Young said.
Repairs include new decking, new drywall in several locations, some new siding, two new doors and two new windows.
When the harbor bought the building for $40,000 in February, a “cursory inspection” was done, but not a “real careful inspection,” Young said. “We learned a lesson from that.”
The harbormaster said that the repairs are needed improvements for the opening of a high-caliber restaurant.
“We paid a reasonable price for the building and even with costs of the repairs, we got a good deal on it,” Young said.
Richterich and Jones Construction Company is expected to start the repairs Friday and complete them within a month.