Status of Innova Loan – 238 Vernon Street, Roseville, CA

The Roseville Community Development Corporation (RCDC) is a 501(c)(3) non-profit public benefit corporation formed in 2010 by the Roseville City Council to:

“The Roseville Community Development Corporation is a community based nonprofit business focused on physical, economic and educational development throughout the community resulting in expanded employment, economic prosperity and housing opportunities for all.”

The RCDC’s initial startup capital of $5 million was loaned by the City of Roseville specifically for property acquisitions, business loans in the larger Downtown Roseville area and formation/operations costs.

The RCDC is run by a board of five directors comprising members of the business community who volunteer their service.

The RCDC’s monthly meetings are open to the public. Agendas are posted online in advance at www.rosevillecdc.com. All meeting minutes and contracts, including the loan agreement between the RCDC and Innova Vernon L. P. can also be found on the RCDC website.

On Sunday, Nov. 10, Sammy’s Rockin’ Island Bar & Grill closed.  The decision to close the restaurant was made by Innova Restaurant Concepts, owner of the restaurant.  The decision to close the restaurant was done without consultation with the RCDC and the closure came as a surprise.  The RCDC was made aware of the restaurant’s closure on Monday through media reports and staff contact.

The closure of the restaurant is particularly disconcerting as it coincides with the announcement of the disappearance of Steve Pease.  Steve has been an active member of the community and a pioneer in downtown development.

On Monday and Tuesday, the RCDC was in fact-finding mode regarding the circumstances of the restaurant closure.

While media and public interest were high due to the disappearance of one of the owners, the RCDC staff and legal counsel were exploring next steps regarding the protection of RCDC interests and ability to reopen the restaurant.

Until the RCDC Board met on Thursday, November 14, and had an opportunity to discuss these matters, the RCDC was not in a position to comment on the interests of the RCDC including the loan to Innova Vernon L.P (Innova).

At this point, the following update is available:

  • On February 22, 2012, the RCDC entered into a loan agreement with Innova in the amount of $1,512,500.  The purpose of the loan was to assist in the completion of improvements to attract a major restaurant/entertainment venue.
  • The funds from the $1,512,500 loan from the RCDC to Innova were disbursed in 19 progress payments.  Payments were made from the RCDC to Innova once contractors verified the completion of tenant improvements within the building.  The final loan disbursement was made September 11, 2012.
  • Innova had made its initial $9,165.45 payment on the loan and currently one payment is past due. The RCDC is working with Innova to determine the status of its ability to make payments.
  • The RCDC board authorized staff and legal counsel on Thursday, November 14, to take action to protect the RCDC’s interests.
  • A notice of default was delivered on Thursday, November 14, to Innova alerting them of the late payment and providing the contractually mandated opportunity to cure the deficiency.
  • At this time the RCDC Board and staff remain focused on pursuing options to reopen the restaurant.
Media contact: Howard Rudd, RCDC Board member (916) 773-9330

 

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