It has been a little over two weeks since we shut down Heartland and began the arduous process of relocating whatever assets we didn't sell to our new location in Lowertown. While that has been a sometimes taxing and difficult task, it is nothing compared to what we endured during our efforts to secure financing for our real estate purchase as well as for the cash needed to operate our business.

The journey began almost a year ago when our friend Kris Maritz approached me about a possible partnership that would entail the purchase of a commercial real estate property that could then lease space to our restaurant. Kris would buy into Heartland and finance the down payment for the real estate. We would become minority partners in the new real estate holding company while increasing our majority share in the corporation that owns the restaurant. We discussed several possible scenarios and then set about looking for an appropriate location.

Our first attempt was centered on our existing location. Would our landlord be willing to sell the entire block that included our restaurant? We would then add a market and banquet room to our existing operation while expanding the kitchen space. In addition, we would pursue the purchase of a vacant lot on the corner of Fairview and St. Clair that would serve as both parking and as an outdoor neighborhood farmers' market during season. The idea was to create a "Heartland Block" in Macalester-Groveland. We could then preserve our investment in our then current location which is less than one mile from our home. Walking to and from work for the last eight years has been one of my most treasured perks. Unfortunately, our landlord was not willing to sell. And so our journey to relocate Heartland began.

Working through Kris' real estate agent as well as on our own, Mega, Kris and I looked at or investigated somewhere between 50 to 60 different properties to no avail. We had limited our search to three areas that we felt posed the greatest upside and chance for long term success. Those were Northeast Minneapolis, the Minneapolis North Loop and the Lowertown neighborhood of downtown St. Paul. The property had to be able to not only house our restaurant operations but also needed to offer us the opportunity to expand our offerings. Ideally, we would have a larger dining room, full bar, banquet space, outdoor seating and room for a retail market with the potential for further expansion into wholesale operations. We were willing to settle for part of the wish list. Finding something in foreclosure that would afford us the ability to purchase a property below market value was also a major consideration that helped frame our search parameters.

Eventually, during a meeting with the St. Paul Department of Planning and Economic Development, we were alerted to a property on the corner of Fifth Street and Broadway in Lowertown directly across the street from the St. Paul Farmers' Market. The Market House was designed J. Walter Stevens and built in 1902. It is a former warehouse with a magnificent atrium and exposed post and beam construction. It was redeveloped in the early 1980's as the first mixed use residential and commercial condominium property in the Twin Cities. The commercial spaces had been in foreclosure but were more recently removed from that and given clear titles. They were owned by North American Bank in Roseville.

As soon as Mega and I walked into the building, we knew that we had found the right location. It had everything on our wish list except for room for outdoor dining. As a trade off, the location across the street from the Farmers' Market offered great views while the interior was filled with natural light streaming in from the walls of windows surrounding the building as well as from the massive rooftop skylight six floors above. The demographic seemed perfect for us since our practice of using only locally sourced product is exactly what farmers' market shoppers are seeking. In addition, we discovered ample parking options within a two block radius of the front door. Given the success and profitability of our business and the solid financial backing we had, we anticipated a quick and easy road to financing both the real estate purchase and the loan necessary to expand and operate the business. Nothing could have been farther from the truth.

When the real estate market crumbled precipitating the banking crisis that came to a head in 2008, the federal government stepped in to stabilize the financial markets. The lessons of 1929 were not lost on today's decision makers. They realized that no matter what the reasons for the current crisis or no matter where the blame lies, to do nothing would have dire consequences that could possibly trigger another Great Depression. Through bipartisan action, the decision was made to bail out the banking industry. The Troubled Asset Relief Program or TARP was designed to assist those financial institutions that found themselves perilously close to insolvency due to the subprime mortgage debacle. The idea was to create a climate wherein loan money would be made more accessible to those of us needing funds to create or expand businesses thereby fueling new job creation while preserving those jobs already in place. With those funds, came conditions and oversights to which the banks were previously not subjected. Consequently, many smaller banks and especially community banks that were well run and in no danger of insolvency rejected those funds with the understanding that they wouldn't be held to the same scrutiny as those accepting TARP money. It hasn't exactly worked out that way.

What we have seen is completely indiscriminate review by the federal government of all banking practices whether or not the bank or financial institution actually accepted any TARP money. The penalties and repercussions for not meeting these new federal standards can sometimes be onerous, and many banks have stopped lending to small businesses. As a result, obtaining a business loan has become more difficult and not less difficult. This is to what some people refer when they complain that the money has made it to Wall Street but not to Main Street, and that is what many of those same people claim is largely responsible for stifling economic growth and job creation.

While we were able to obtain financing for our real estate purchase as well as terms for a Small Business Association loan for the restaurant, we were not able to readily obtain that financing at terms that were reasonable or acceptable to us. Previously, one could buy a commercial property and then leverage 90% of its appraised improved value for the funds necessary to make those improvements. All of a sudden some banks were saying that they would only allow for 75% of that appraised value to be leveraged, and the appraisals were being subjected to reviews by other appraisers. Gaining a favorable appraisal has now become a sort of cat and mouse game among various appraisal agents. The formulas used are not always consistent and sometimes appear to be arbitrary. Down payment requirements and interest rates have also become stringent and less appealing. Consequently, what should have been a relatively quick process for us was drawn out over the course of several months thereby setting our project back by 90 days before we could obtain terms that made long term financial sense. We got extremely close to having the whole project blow up in our faces even though we went into the process well funded and with perfect credit. Not only that, but we had demonstrated eight years of success, had little to no debt and remained profitable during the worst economic crisis since the Great Depression. Is it no wonder that the vast majority of Americans are questioning the wisdom and effectiveness of the federally funded bail out?

Not only did we face significant challenges in sealing the deals to launch our project, but we had a terrible time finding a qualified buyer for the assets we currently owned at Heartland's old location. After meeting with several successful restaurateurs and chefs who could not obtain the necessary financing to purchase our equipment and to assume a very favorable lease extension, we thought we would have to move everything lock, stock and barrel to the new location. That would force us to leave a dark and empty store front in our neighborhood at what was once a vibrant commercial corner. That was not a scenario that we anticipated or desired. Fortunately, our friends with the Blue Plate Restaurant Group stepped forward at the eleventh hour with a cash offer. That was good for us, good for Blue Plate, good for our landlord and good for the neighborhood.

I learned a few hard lessons during this process. One thing I learned is that federal economic policy might seem like it doesn't affect most of us on a daily basis, but it most certainly does. When small businesses are unable to secure the funds necessary to help grow the economy and create new jobs, then we all suffer. Store fronts go dark. People remain unemployed or, what is worse, lose their jobs. Development and redevelopment are stifled. Opportunities are lost.

We were very fortunate in that we were able to persevere and bring our vision to reality. It makes me wonder, though, how many others were not so fortunate.