Atascadero launches loan program to help local restaurants 

More food establishments could open up in Atascadero thanks to a new loan program the city started to help revitalize downtown.

The city is planning to start accepting loan applications in January. The Restaurant Development Incentive Loan Program started in 2021 as part of the city's action plan to attract more businesses and restaurants to its downtown area. Due to inflation and the increasing costs of goods and services, the city developed a $1 million loan fund using tax Measure D-20 revenue that would go toward things such as reducing startup costs for businesses, said Loreli Cappel, the deputy director of Economic and Community Development.

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• File Photo By Jayson Mellom
• MORE FOOD Downtown Atascadero could get more restaurants, all thanks to a brand new city loan program.

"Our whole goal is to send a message to anyone in the county or outside of our county that we really are open for business," Cappel said. "We want their business and we're doing everything we can to incentivize that, and that's pretty exciting."

Atascadero partnered with the nonprofit Economic Development Collaborative (EDC) to head the new loan program. According to Mayor Heather Moreno, the city is working with the EDC on a variety of steps, like forming a loan selection committee and finalizing several details.

"It's really important to know that the city is not making decisions on who gets loans," Moreno said. "It's through the EDC, but they will have a board of lenders, people who understand looking at financial statements and business plans and are able to assess the viability and the likelihood of being paid back and that a restaurant would succeed."

To qualify for a loan, restaurant applicants must have on-site dining facilities, be open five or more days per week, and be working with property developers who are interested in completing improvements in a proposed or existing space. One of these property developers is Max Zappa, CEO and broker of Z Villages Management and Development. Zappa developed the La Plaza building in downtown Atascadero and has been in conversation with the city about the program.

"That kind of business has a really expensive initial investment. Whether it's the property owner, developer, entrepreneur, or restaurateurs, somebody has to put up a significant amount of money to build a kitchen," Zappa said. "And making that happen and making it more feasible or giving people another option is really what the goal was in financing those types of things."

According to Zappa, getting vacant spaces filled has been a slow process, and they've only leased out 75 percent of their properties due to the fact that building a commercial kitchen cost around $200,000.

"The pandemic just kind of exacerbated the housing crisis, and the cost to build anything is really, really high these days with high labor and high construction material costs," Zappa said.

According to Cappel, any interest received on the loans will be put back into the program, potentially facilitating more restaurants in Atascadero.

"A million dollars is a significant amount that we can put into that fund, and I think we could get eight amazing new restaurants in downtown Atascadero in the next couple of years," Cappel said. Δ