St. Paul City Council members, meeting as the Housing and Redevelopment Authority, voted Wednesday to write off most of a loan with interest amounting to $512,000 that the HRA awarded 10 years ago to Mai Village, a popular University Avenue restaurant that has been unable to pay its debts.
The HRA accepted $25,000 for the loan from the Hmong American Partnership, which plans to buy the Mai Village building, lease the first floor back to the restaurant and use the second floor for its programs.
The decision means that the city lost $487,000 on the loan, the original amount of which was $400,000. But it would have been left holding the bag completely if the HRA hadn’t acted.
That’s because the building has been in foreclosure since last fall and will revert to Western Bank in two weeks if the Hmong American Partnership’s plan to buy the restaurant’s debt doesn’t succeed.
The partnership is offering to buy the U.S. Small Business Administration’s $880,000 debt for $100,000, and the bank’s $1.86 million debt for $1.55 million. Mai Village’s total debt amounts to $3.25 million.
Although Mai Village is a favorite restaurant of state government movers and shakers as well as neighbors, it lost business as the recession began to hit in 2007. That was compounded when light-rail construction a few years later made the restaurant hard to reach.
Also Wednesday, the City Council unanimously passed without discussion a land-use plan to guide development of the city’s 17-mile Mississippi River corridor in the next 30 to 50 years. The Great River Passage master plan spells out projects in the corridor aimed at conserving natural areas, adding riverbank amenities and making the river more accessible.