By Don Spatz
Hector Ruiz became on of Reading’s newest business owners on May 31, buying the decades-old Tommy’s Café & Cabana Bar in the 200 block of Douglass Street, where he’d been the chef for most of 10 years.
The journey from being a fire hall dishwasher at 16 to proprietor – the first in his family even to own property – has been surreal, the 37-year-old Ruiz said as he sat among the bar’s old city memorabilia, including an old Reading Beer cooler that’s been there for at least 50 years and might be the only one still working.
But it took city financing to do the deal. Ruiz said he could not have taken over the business without it.
Ruiz is getting help from the city’s fledgling microloan program, offering a 3 percent fixed rate on loans from $1,000 to $35,000.
Begun in August, the loans can be taken for five to 10 years, and pay for such things as equipment, working capital, marketing, renovations or inventory. And they can be used in conjunction with other financing.
Ruiz received $35,000 from the city, and financing from the state and the Community First Fund. He’s applying the city money for startup costs and operating costs such as inventory and first payroll for his nine employees. “It seemed so amazing that it happened,” he said. “What’s really amazing is that three agencies came together on something.” Daniel S. Robinson, the city community development director whose department runs the program, said it’s gotten a lot of inquiries and several dozen businesses have filed preliminary applications.
So far, four loans have been made and others are pending, he said. “I’ve been impressed with the people coming in – African-Americans, Hispanics, women who own businesses,” Robinson said. He said the city gives preference to applications who would create new jobs, but that’s not a requirement. “We want businesses to stay here, and others to come in,” he said.
Safeguards in place
Robinson is acutely aware of the city’s past problems in documenting and collecting business loans. City Council is debating whether to write off nearly $1.8 million in 16 loads from the 1990s, most of which are considered uncollectible. Robinson said the new loan programs are run by the book. He said all are properly documented, and a third party – the nonprofit Community Initiative Development Corp. – does the underwriting and files the liens on the homes and properties to make sure there’s collateral. “The CIDC makes the decisions and tells the applicants yes or no, so there are no conflicts,” Robinson said, referring to some previous loans that went to relatives of city officials without proper documentation. “We’re running it like a bank,” he said. “We’re trying to take losing any money out of the equation.”
The city has $300,000 available for the loans, a pot that gets replenished as the money is paid back. The money came from the state for similar loans years ago that have been paid back and the city is recycling it. Meanwhile, Ruiz is making plans for the bar that has ample inside room as well as a double-deck cabana in a private patio out back.
The business will re-launch in early August as Sofrito Gastro Pub, he said.
Ruiz moved to Reading from Massachusetts in the 1990s and said he fell in love with the city.
“I’m hoping to be a part of the movement to bring Reading back to what it was,” he said