BIDDEFORD — The Biddeford-Saco Area Economic Development Corp. is pursuing legal action to recover money loaned to a restaurant that was slated to open on Main Street next week.
The EDC loaned $125,000 to Steer N Stein and its owner, Harold E. Royals, to renovate space at 140 Main St. before opening a bar and grill there, Adam Shub, an attorney for the EDC, said Thursday.
Biddeford Economic Development Director Daniel Stevenson said this morning that $20,000 of the loan came from the city’s CDBG Micro-Enterprise loan program. The makeup of the remainder of the loan is not clear; Stevenson said the EDC often cobbles together loan funds from a number of sources to advance economic opportunities.
Shub said the EDC is in the early stages of taking legal action to recover the money, alleging it was spent on activities unrelated to opening the business. He would not provide details about the alleged misuse of money.
In state filings, Royals is listed as manager and sole member of Burger, Beef & Brew LLC, doing business as Steer N Stein Pub & Grill.
Royals did not respond to a phone call or email seeking comment this morning.
Steer N Stein, which describes itself on its Facebook page as “a local pub serving 50 drafts … and great burgers,” was scheduled to open March 1.
In a Feb. 12 Facebook post, however, the restaurant implied the date would be pushed back, saying it had run into unexpected renovation costs and needed another investor.
“I am looking for a investor/partner in the pub. … My face lift to the property turned into a complete rehab, now you have the chance to be part of a great pub for a fraction of the cost,” the post reads.
In a Feb. 9 Facebook posting, Royals outlined a “Partner Cards” program, in which investors could reap food and drink in return for $500 or $1,000 in cash.
The city of Biddeford has a long history of working with the EDC, which provides gap financing for projects that require cash, fixed-asset financing, startup and working capital, and real estate acquisition and development. Since 1992, the organization has provided 124 loans totaling $7 million to 73 area businesses.
Shub said the EDC is dedicated to ensuring a restaurant of some kind eventually opens in the space.
“It is unfortunate when something like this occurs,” Mayor Alan Casavant said in a statement. “We will work with the EDC and are confident in a resolution that is in the city’s best interest.”
City Councilor Bob Mills said this morning that he has met Royals and his other business partners, and is hopeful Steer N Stein will remain the tenant.
“I’m sure their intent is not to not be successful on any loans,” Mills said. “I’m pretty confident they’ll still go forward.”
Mills also stressed that despite some rumors on social media, the city did not ask Royals to open a restaurant in Biddeford, nor is the city the one suing him.
“This new guy came into town,” Mills said. “He made a deal with the landlord. The city did not recruit him.”
The extent of Royals’ involvement in a failed Gardiner restaurant, Alex Parker’s Inc., is unclear, although his name was listed along with Peter Powers in a 2013 Facebook post from that restaurant, thanking those who had sent flowers for its opening night.
The City of Gardiner had made a $40,000 loan to Alex Parker’s Inc., which filed for bankruptcy in April 2015, along with Powers, who was listed as the debtor.
— Staff Writer Angelo J. Verzoni can be contacted at 282-1535, ext. 329 or averzoni@journaltribune.com. Senior Staff Writer Tammy Wells can be contacted at 324-4444 (local call in Sanford) or 282-1535, ext. 327 or twells@journaltribune.com.
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