A Third Street restaurant and bar building owned by City Councilman Steven D. Fournier could go to a foreclosure auction this summer because Fournier failed to pay back a city loan.
Fournier, elected to the City Council in 2007, received a $75,000 loan from the city's NFC Development Corp. in August 2004 to develop a bar called Cafe Etc. in a building Fournier owns at 462-466 Third St.
But, according to foreclosure documents, Fournier stopped paying the loan in September 2008. The city development agency began proceedings to foreclose on a mortgage on the building in February.
Fournier said he hopes to work out a deal within a few weeks in which a Niagara Falls developer buys the building for the outstanding loan and pays back property taxes owed on the property.
"Basically, I'm not going to make anything on it, but I want to see someone from Niagara Falls develop it," Fournier said. "If they can't come to an agreement, it will go to a foreclosure auction." Fournier, who declined to name the potential buyer, said the deal would likely require approval from the NFC Development Corp.
City Corporation Counsel Craig Johnson said a foreclosure sale could be scheduled on the building within the next six to eight weeks.
"The foreclosure process takes time and is somewhat cumbersome," Johnson said.
If Fournier finds a buyer for the building, Johnson said, that buyer would need to pay off the balance of the NFC Development loan. Another option, he said, would be for the buyer to submit an application to the agency to assume the loan.
Any applicant would have to be "credit worthy" and have a business plan scrutinized by the NFC Development board, Johnson said.
Fournier, elected to his first term on the City Council in 2007, shut down Cafe Etc. in 2008 after operating it as a jazz club, bar and restaurant for about six years. He said he purchased the building in 2000 for $43,000, but sought the city loan to help restore the bar.
Fournier said he invested more than $195,000 in restoring the building, including adding a patio and upgrading the kitchen, but he struggled to keep Cafe Etc. running after several nearby property sales pushed his property assessment up, doubling his real estate taxes.
The increased taxes, combined with a public project to reconstruct Third Street that shut it down to traffic for several months, hurt his business. Property owners on the street have complained that the neighborhood has been slow to develop since. "I stuck it out for a lot of years," Fournier said.
The building once housed a bar owned by Fournier's father, and Fournier said he had dreamed for years of opening his own business in the site.
"The sad part is, I think the street is slowly coming back now," said Fournier, who now manages restaurants at One Niagara. "But I've been hearing for 10 years, 'hold on.' Well, I couldn't hold on any more."
The building also houses Donatello's Restaurant, which is run by Fournier's father.
Fournier said he sought the city loan -- which had a 20-year payment schedule at 5 percent interest -- because he couldn't obtain a commercial mortgage for the property.
"I tried. I was the first one on the street, before the casino came, and then everyone told me to wait until the casino came," Fournier said. "And then the casino came, and it still didn't pick up business, and they said, 'wait until the street is done.' And then the street was done, and it still didn't pick up."