Goombas restaurant closes, owes balance on Grass Valley city loan
March 20, 2014
Goombas Italian Family Restaurant closed last month after five years of business near Grass Valley’s historic downtown area. But the restaurant still owes money for a loan they received from a city program.
In April 2009, the city approved the use of $165,000, from the Income Business Revolving Loan Account program, to be disbursed into an existing local escrow account.
The loan aimed to keep the restaurant afloat with necessary working capital, and also creates a minimum of five full-time equivalent jobs.
The loan’s terms gave a fixed interest rate of 2.25 percent, with deferral payments for the first six months. Beginning in the seventh month, though, the loan required monthly payments of $1,537 for 10 years.
As collateral, the owners/borrowers of the loan offered up two real estate properties, one of which was a commercial property located at 203 Mill St., in Grass Valley.
After rumors began to surface earlier in the year that Goombas was closing, the restaurant’s Facebook page posted in late January that, “Our last day will be Superbowl Sunday. Except for a few private [parties]. The restaurant will be closed for two weeks for cleaning and inventory for the new owners … Keep a look out for their grand opening.”
But on Feb. 26, the Facebook page stated that the reopening was canceled and that “After five months in escrow, three days prior to close of escrow, one of the buyers’ investors backed out and they couldn’t make it happen. We are sad for our employees and sad for the community. But we have decided to move on.”
According to Grass Valley Economic Development Coordinator Jeri Amendola, the borrowers of the restaurant’s original loan have a balance of $101,000, and have gone into a forbearance agreement with the city that will end on July 1.
The owners will sell all restaurant fixtures and equipment before the July deadline, and any funds from those sales will be offered up to pay for the loan’s remaining balance.
“The borrowers have been very cooperative and on time with every payment on this loan, from the beginning,” Amendola told The Union. “After the forbearance period is over, we will come together with the borrowers and work out a new agreement to pay back the balance.”
Goombas’ owners said that they decided to close the restaurant to concentrate on selling the building, and declined to comment further.
The restaurant’s location, at 450 Colfax Ave., formerly housed the “Duck Inn,” a bar that was demolished with city approval, and reconstructed into Goombas Italian Family Restaurant.
The property is currently listed at $575,000 for more than 4,400 square feet.
To contact Staff Writer Ivan Natividad, email email@example.com or call 530-477-4236.