Watertown LDC OKs $50,000 loan for deli planned on Gaffney Drive

Oct 01, 2009 (Watertown Daily Times - McClatchy-Tribune Information Services via COMTEX) -- SLDDF | Quote | Chart | News | PowerRating -- A nearly completed restaurant on Gaffney Drive got a boost from the Watertown Local Development Corp.

The corporation's board agreed at a special meeting Wednesday morning to lend Romalato's Gourmet Delicatessen $50,000 for equipment, fixtures and working capital.

Mayor Jeffrey E. Graham said the sales predictions made the deli look like a safe investment.

"Why are we here and not others?" he asked.

Trust Chief Executive Officer Donald W. Rutherford said, "It's a food industry business and they're considered high-risk. The bank wouldn't do this without us."

The loan from Watertown Local Development Corp., also known as Watertown Trust, will join a like-sized loan from the North Country Alliance.

The alliance's loan will be repaid after five years. The Trust's loan will have a 15-year term with interest beginning at 6 percent and re-evaluated after five years.

To ease concerns about risk, the Trust will require quarterly financial statements, and personal and corporate guarantees from the two owners.

"We've increased the rate to match the risk and we're putting in other guarantors to mitigate the risk," Trust board member Jennifer L. Huttemann-Kall said.

The deli will be near two proposed hotels and Make and Take Gourmet, which seems to be the same target audience, City Manager Mary M. Corriveau said.

The business will create a handful of jobs and fill a niche, Mr. Rutherford said.

The establishment will have an "old-world tradition" shop with dried meats, marinades and bruschettas as well as a deli, in-house bakery, grill, entrees and appetizers, said Todd J. Badalato, one of the owners of Romalato's.

"The concept is pretty unique to the area," he said. "We will have fresh, wholesome products that are homemade and affordable to everyone."

Mr. Badalato owns New York Felt in the Jefferson County Corporate Park on outer Coffeen Street, and business partner Augustine A. Romeo owns Nelson's Dry Cleaners and Formal Wear, next to the site for Romalato's at 450 Gaffney Drive.

Romalato's will have delivery, walk-in, pickup and make-to-order business. Entrees will have a wide range, not just Italian, Mr. Badalato said.

"We will adjust the menu seasonally," he said. "There's always going to be changes."

The deli should open by January, he said.

But Mr. Graham wondered aloud about the Trust's involvement in restaurants.

"How much do we want to be involved in local food service outside of downtown?" he asked. "We're creating rivals to existing business."

Ms. Huttemann-Kall said, "Banks aren't looking at restaurant projects right now and there will always be a need for restaurants."

Mr. Rutherford said that the board would have to create a consistent policy if it wanted to refuse loans to restaurants and convenience stores.

"We're going to get into a situation where 'why does the downtown get priority over the north side,'" he said. "Any person doing job creation and expansion in the city is welcome to come in."

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