GARDINER — Owners of a soon-to-open restaurant hope their new eatery, and their improvements to an unpopular public walkway, will draw more people and businesses downtown.

“If there are more places down there, more will come,” said Peter Powers, co-owner of Alex Parker’s Steak House. “Build it, and they will come.”

Powers isn’t the only one hoping for a domino effect from his restaurant or with a vested interest in its success.

The city loaned Powers $40,000 to help cover startup and renovation costs for the new restaurant at 295 Water St. through its revolving loan fund.

With the fund, once loans are paid back, the money can be loaned out again to fund additional applicants.

At the end of fiscal year 2012, the city had around $630,000 in the fund and almost $250,000 in outstanding loans, according to documents provided by the city.

The fund was established with a United States Department of Agriculture Rural Development loan in 2001. The city has paid roughly $21,000 year to the USDA since 2005 and will do so through 2029 until the loan is paid off, Morelli said.

The purpose of the fund is to provide gap financing for ventures unable to secure the loans from a bank, Morelli said. But if the business goes belly up, the city is usually the last in line to be repaid and ends up writing off the remaining balance, he said.

The city has written off three loans in the last five years, totaling just over $100,000.

Currently the city has nine active loans with under $300,000 remaining to be paid off. Several other downtown businesses have taken advantage of the program, including A1 Diner, Johnson Hall Performing Arts Center and ArtDogs.

Loan applicants are first reviewed by Kennebec Valley Council of Government’s loan officer, then the city’s Economic Development Committee passes on its recommendation to the City Council for final approval.

Cole Palmer, KVCOG’s loan officer, said revolving fund loans are traditionally granted based on the potential for creating or retaining jobs.

Palmer is contracted by the city to review applicants, but KVCOG also has its own revolving loan fund.

In Power’s case, the committee recommended granting the loan based on Power’s past success with restaurants in Georgia and Florida, the amount of personal cash he was putting in the business and his enthusiasm for improving Gardiner’s downtown. Powers said he plans on hiring around 16 part- and full-time employees.

“It’s truly the right time for Gardiner to have this, and the guy’s energy and enthusiasm is just spilling over,” said Geri Robbins-Doyle, chairwoman of the Economic Development Committee.

She said she hopes the restaurant “will be the catalyst to get other people to pay attention to Gardiner.”

Besides undertaking significant renovations to the restaurant’s interior, the restaurant owners vastly improved the stairway from the Arcade parking lot to Water Street, adding chandelier lighting, a fresh coat of white paint and a security camera.

Gardiner Main Street Executive Director Patrick Wright recently held a ribbon-cutting ceremony for the walkway with city officials who all lauded the new look.

“You have transformed what’s long been considered an eyesore, if you will, into what already looks like a gem,” said outgoing mayor Andrew MacLean, before Powers cut the ribbon.

Morelli said that with only finite city funds available for projects like the walkway, public and private partnership are often able to accomplish more.

“That’s how you make things happen,” he said.

Paul Koenig — 621-5663
pkoenig@mainetoday.com