A salon and spa business plans to move into the building formerly occupied by the Canyon Grille restaurant in Coon Rapids.
Simonson’s Salon and Spa is moving from its current location at Bunker Lake and Round Lake boulevards in Anoka to 3490 Northdale Blvd.
Simonson’s, which is planning to purchase and renovate the building, has received a commercial loan from the Coon Rapids Housing and Redevelopment Authority to help pay the cost.
According to Matt Brown, Coon Rapids development specialist, Simon’s plans to open at the former Canyon Grille location in early 2014.
“Simonson’s started looking for a building to own and this was a good fit,” Brown said.
The Northdale Boulevard location is double the square footage of its present site, he said.
Simonson’s will bring its current 34 employees from the Anoka shop to the new site and add five new employees, according to Brown.
Simonson’s offers a full array of salon and spa services, including hair styling, therapeutic massage, facial, body waxing and manicures and pedicures, Brown told the HRA.
Owner Kyle Simonson opened her first salon and spa in Anoka in 1983 and has since added locations in Maple Grove and Plymouth, both of which have relocated into newly constructed owned facilities in the last few years, he wrote in his report to the HRA.
The HRA-approved $100,000 loan, which will be for 15 years at 6 percent interest, is part of a $1,628,500 project package that includes purchase price ($700,000) and renovation ($771,599) plus $47,369 for professional fees and a $75,000 contingency, Brown wrote.
The bulk of the financing will come from a $1,315,500 Small Business Administration 7a loan from Wells Fargo Bank, according to Brown.
Simonson is providing cash equity totaling $213,000 toward the project cost, Brown wrote.
“Because the SBA 7c program will only finance 80 percent of the project cost and 85 percent of the appraised value, the HRA loan is necessary for the project to move forward,” he wrote.
The city loan will be taken from a loan fund that the housing and redevelopment authority, which comprises the seven members of the Coon Rapids City Council, established in March as a tool to facilitate development projects meeting city goals, Brown told the HRA.
It is funded by an allocation from the authority budget and repayments of Minnesota Investment Fund loans that the city had previously used to help other businesses, he wrote.
“This is the first project to be funded from this loan fund,” Brown said.
According to Brown, this project is a good candidate for the HRA commercial loan for several reasons, including the fact that the Canyon Grille restaurant site has been vacant for over four years and its unique building design has prevented many alternative uses.
“Simonson’s is a high profile, established business with a successful history,” Brown wrote.
The Central Minnesota Development Company, which will service the HRA loan, has reviewed the loan application and recommends approval of the request, he wrote.
“The business has sufficient cash flow to cover the debt and the borrower has excellent personal credit,” Brown wrote.
The HRA action to approve the commercial loan was unanimous.
The borrower is KyleEstates III, LLC, Maple Grove, which will own the property and lease to Full Presence, Inc., doing business as Simonson’s Salon and Spa.
The HRA loan will be secured by a mortgage and personal guaranty, according to Brown.
According to its website, Simonson’s Salon and Spa is the only salon and spa to be named one of American’s fastest growing salons for 10 years in a row by Salon Today magazine.
Simonson’s was one of the first salons in the U.S. to recognize the movement combining salon and spa services into a single environment, the website states.
Simonson’s corporate offices, along with its Maple Grove salon and spa, is located at Lifestyle Commons retail development in Maple Grove along Highway 94.
Peter Bodley is at [email protected]