With a quick vote this month to lend $50,000 to a Glenwood South shop, the Raleigh City Council drained the last of its downtown business loan funding.
Trig Modern – a furniture and design showroom that recently opened in a former office on West Jones Street – is the latest of seven businesses to borrow from the Downtown Raleigh Loan Program. The city council started the program in 2006 to spur jobs and reinvestment in downtown, where older vacant storefronts can be expensive to renovate.
The city only issued a few loans in the early years of the effort, prompting the council to expand the boundaries last year to Glenwood South and other areas. That allowed Trig Modern owners Lee Tripi and Robert Drake to seek money to offset $142,000 in renovation costs.
Fulfilling a need
Tripi has run an interior design business in Raleigh for decades, but he’d never had a showroom until he partnered with Drake, a lighting expert who had recently moved up from Charlotte. They tore down walls in the old office building and set up hip furniture displays, light fixtures and model kitchens and bathrooms. Trig Modern hopes to serve empty nesters looking to redecorate and the growing numbers of apartment dwellers downtown.
“We want to cater to that market,” Tripi said. “That was a big part of why we wanted to be downtown.”
The Trig Modern loan was unusual for the program because the store was already open. Tripi applied before he even settled on the location, but the approval process has taken months. And he points out that there’s plenty of work left – part of the showroom is unfinished and the bathrooms still need to be renovated. That will use up the borrowed funds and then some, Tripi said.
Other projects that received loans – such as the Raleigh Times’ restaurant expansion and the renovation of a former furniture store at 111 E. Hargett St. – started work after their funding came through. Trig’s request got support because the business fulfills an unmet need downtown, Tripi said.
“We’ve got (more than) 60 bars and restaurants, but very little retail,” he said.
Will program expand?
Some Raleigh leaders have questioned why the loans go mostly to established businesses rather than startups. Raleigh Times, for example, is one of downtown’s most popular restaurants and is owned by real-estate developer Greg Hatem.
City Manager Russell Allen has said the program targets businesses with “a track record so that we don’t put our money at risk.” Loan applicants also have to show that private lenders turned down their project. The city earns a modest 3.5 percent interest on the loans.
With Trig Modern getting the last of the funding, the loan program’s future is uncertain. The loans are for 10 years, and the next one won’t be paid off until 2020, according to Luther Williams, the program’s administrator.
Councilman Eugene Weeks said he’d like the city to replenish the funds. “As we see a small silver lining in the economy, I would not have any hesitation with increasing it,” he said.
Weeks added that he would like to see the boundaries expanded again. Business districts around Shaw University southeast of downtown could also benefit.
“Put us on the same playing field as others and get us a big vision, not just a wall around one area,” he said.