The Watertown Local Development Corp. agreed Thursday morning to give local restaurateur Michael John Cavallario a $200,000 loan to buy Shortys Place on Coffeen Street.
For the past eight years, Mr. Cavallario has run the diner, and now he is arranging to purchase it from 81 Front Street Development LLC, a company owned by Alexandria Bay businessman P.J. Simao. The purchase price will be $1.1 million, WLDC board member Mark S. Bellinger said after the vote.
Mr. Cavallario has leased the property from Mr. Simaos company since opening it in 2004.
Describing it as a successful business, Mr. Bellinger said, They have strong numbers for a diner-type restaurant, and its a great location.
Mr. Bellinger said Mr. Cavallario wants to use the loan as gap funding for the deal. Mr. Cavallario also is looking for a loan from Watertown Savings Bank, said Mr. Bellinger, executive vice president of the bank. The 20-year loan from the WLDC, also known as the Watertown Trust, will carry a 5 percent fixed interest rate.
Its also a good move to acquire the building and property because Mr. Cavallario will be paying $300 less on his mortgage than hes paying in rent, board member Erika F. Flint said.
The building and 3.65-acre parcel are assessed at $593,500. Mr. Simao purchased the property in 2004 for $1.3 million.
Eight years ago, Mr. Cavallario, who could not be reached for comment Thursday, opened Shortys Place at the site of the former Chappys Classic Diner, 1280 Coffeen St.
His family ran a produce farm on Coffeen Street from the 1930s until branching out into the restaurant business. Members of the extended Cavallario family own restaurants in Watertown and several nearby communities.
Shortys serves breakfast, lunch and dinner.
In August, Mr. Simao, who declined to comment on the deal Thursday, put parts of Ives Hill Country Club up for sale.