EDA Releases Lien Against Shuttered St. Cloud Restaurant

(KNSI) – The St. Cloud Economic Development Authority voted Tuesday to release their third lien on a commercial loan with Karpos, LLC.

The company is the operating entity of the now-closed Searles on Fifth Ave restaurant. The money came from the EDA’s revolving loan fund and totaled about $57,000 in principal. So far, only around $2,100 has been paid back.

The claim on the property was third in line behind a bank’s commercial mortgage and the U.S. Small Business Administration. The bank has found a buyer from Waite Park who hopes to open a Latin restaurant at the location and the purchase price is not enough to make all three lenders whole. If the EDA had not agreed to release the lien, the bank would have foreclosed on the property to allow the sale to go through. That would result in a complete loss for the EDA on what is still owed.

Searles on Fifth Ave was only open a couple of months before COVID-19 shutdowns were ordered in March 2020 and it did not qualify for economic assistance. The EDA still has the opportunity to sue the owners personally for the balance outstanding but a full recovery is unlikely.

The revolving loan fund still has $243,000 available for future economic assistance.

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