Mayor confident about Rubberform deal
Says Lockport wants to help company despite losses on other failed projects
LOCKPORT — Despite two breaks on loan repayments during the past year, Mayor Michael
W. Tucker said that he’s confident Rubberform Recycled Products will bounce back.
The Michigan Street company was granted interest-only monthly payments by the board of the Greater Lockport Development Corp. June 25; it gave Rubberform the same break last year.
Bill Robbins, chief executive officer of Rubberform, said his company had $1 million in sales in 2008 despite having only two products to offer: sign bases and parking lot wheel stops.
But he said further growth in his product line depends on credit, and it’s hard to get it these days from places other than government.
“The trouble is, the banks won’t lend us any money,” Robbins said. “We’ve got a second round of financing that we’ve been pitching.”
But nobody in the private sector has swung at Robbins’ pitch so far, so Robbins said he is seeking help from the U. S. Small Business Administration.
The federal government’s stimulus package included SBA loans with 90 percent federal guarantees. Robbins said he’s applying for $750,000.
His company needs the loan to leverage other government funds, such as a $500,000 grant from the New York State Environmental Investment Program, which was approved in March 2008. To receive the money, he must match it in full.
Robbins thought he was on the cutting edge when Rubberform, which uses ground-up tires as raw material, hooked up with a California company to produce rubber sidewalks.
“The rubber sidewalk business doesn’t exist,” he said. “It wasn’t anywhere near what we thought it would be.”
The city’s development agency, which could have put the hammer down on Robbins because of missed loan repayments, instead chose to help him along.
“He’s trying to get through it. The economy will turn around, and so will his business,” Tucker said.
“We’re not giving up,” said Robbins, whose company has eight full-time employees. “The biggest problem is, the banks are not relaxing their credit requirements.”
And even though two recent GLDC projects turned to dust, leaving it with substantial losses, Tucker said the agency will keep swinging.
“They’re not all going to work. That’s no reason for them not to encourage these things,” said Tucker.
The corporation lent $100,000 to Barbara A. Brewer in 2003 to open Brewhaus Coffee and Cafe in a former factory at Washburn and Chestnut streets.
But the business folded in 2006 and Brewer defaulted on the loan, as well as a mortgage held by First Niagara Bank.
She owed the city more than $97,000, and ended up with Brewer’s mother’s house, which she had posted as collateral.
It sold the house last month for $91,000, but because there was another mortgage on it that the city had to pay off, it ended up with a net return from the sale of $23,641.
That means the GLDC lost about $74,000 on the Brewhaus deal.
“Brewhaus was a difficult experience for the GLDC, but at the end, we have a beautiful building because [Brewer] renovated it,” Tucker said. Last year, First Niagara sold the property to Niagara County Produce, which opened a Lockport location there that seems to be a hit.
The city agency put even bigger bucks on the line for Peter Calieri, owner of the Village Eatery, a popular Lockport restaurant.
Calieri took three loans totaling $400,000 and in September 2007 opened the Metropolitan Bar and Grill, an upscale restaurant, in Ulrich City Centre on Main Street.
But the Metropolitan went under last November, and after selling the fixtures at an auction, the GLDC shows a loss of $270,000. Tucker said talks on settling a lawsuit against Calieri are continuing. Calieri’s last offer was $70,000.
“Nobody has crystal balls,” Tucker said. “If [the GLDC] worries about things like that, they’re not going to do anything.”
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