FOR IMMEDIATE RELEASE Media Contact: Sharon Linstedt Travers Collins & Company 716-842-2222 x318 Erie County Industrial Development Agency Adhered to Loan Review Guidelines in Lending $50,000 to Controversial Buffalo Restaurant The former One Sunset Restaurant/Nightclub Obtained Funding in 2008 through the ECIDA’s pilot Minority Entrepreneurs Loan and Grant Program August 21, 2009 - Buffalo, NY The Erie County Industrial Development Agency today detailed the process it followed in approving a $50,000 loan to Candies Culinary & Hospitality Group, Inc., One Sunset’s parent firm. One Sunset, which operated at 1389 Delaware Ave., Buffalo, from December 2007 through December 2008, was one of 70 minority and woman-owned Buffalo businesses which applied for loans. Ultimately, 10 of those companies received low: interest loans totaling $370,000, through the pilot program, which is administered by the Regional Development Corporation, the ECIDA’s loan arm. Candies/One Sunset owner Leonard Stokes’ loan request was given the same stringent review as the other applicants, according ECIDA Chief Operating Officer A Culliton “In the last 30 years, this agency has approved more than $100 million in loans to . over 520 businesses. Due diligence is a way of life for us,” Culliton said. Pay "Mr. Stokes’ credit report was better than some of the other applicants,” Culliton added. The ECIDA executive said the agency will comply fully with alll investigations involving public financial aid given to Stokes’ business. “We made a loan decision based on the best information we had at the time,” Culliton said.Stokes and other would-be borrowers first submitted applications in early 2008, ani the field was culled to 28 based on preliminary information. Applicants who made the cut were then required to provide detailed financial information and business plans, and all were subjected to credit checks. A loan committee comprised of agency staffers, community leaders and business executives pored over the Information, selecting candidates most likely to succeed. That committee was empowered by the RDC to make final approvals at its August 2008 session. “By its nature this is a high-risk venture that provides operating capital to people who are not able to qualify for traditional bank financing,” Culliton said. “There are going to be business failures, and unfortunately, that was the case with One Sunset.” The 10-year, low interest loans, are funded through a U.S. Department of Commerce economic development program. Recipients pay interest only for the firs three years, and pay back interest, plus principal over the remaining seven years o the loan term. Stokes, who received his $50,000 loan check in late August 2008, made three ‘interest only’ payments, of $166 each, before his business closed last December. The RDC declared the loan in default early this year after unsuccessfully attempting to negotiate a repayment plan. The agency then sought, and was granted. a default judgment in State Supreme Court on May 4, totaling $51,897, which includes owed principal, interest and legal costs. Despite the Stokes default, Culliton said the minority entrepreneur loan program is a success, with nine of the 10 2008 participants in compliance and going strong. The RDC will begin fielding applications for another round of loans in September. The list of companies that benefited from the 2008 minority entrepreneur program includes: Jericho Demolition, Inc.; Kerns Avenue Bowling Center; Mars Nails & Spa; Affordable Scrubs & Stuff; Donnie’s Smokehouse; ABC Cleaning Services; Serenity Hair Boutique; Singleton Construction Services and Tastings. #H#