Hesperia Out $340,000 Over Failed Effort To Subsidize Restaurant

The city of Hesperia has sustained a $340,000 loss brought about by the failure of a restaurant more than three years after the now-defunct Hesperia Redevelopment Agency sought to kickstart it with a low interest loan.
In December 2008, the Hesperia Redevelopment Agency provided the owner/operator of Kid’s Planet, a Mexican food restaurant located at 15075 Main Street, with the $340,000 loan, which came on top of the mortgage on the property with Arrowhead Credit Union.  Over the next two years, the proprietors sought to make a go of it, investing more into the operation and obtaining another $800,000 loan from the Small Business Administration. By last year, the business was on the ropes and the business and property were put up for sale at an asking price of $1.6 million. Simultaneously, Governor Jerry Brown pushed, and the state legislature passed, legislation that dissolved the authority of all of the state’s cities’ redevelopment agencies. The 15075 Main Street property failed to fetch any offers even approaching $1.6 million and in February Arrowhead Central Credit Union, which held the note on the property, unloaded it to a private investor for $750,000.
Neither the Small Business Administration nor the city, which has inherited the assets and liabilities of the redevelopment agency, recouped principal or interest from the loans.

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