Economic Development Authority Meeting Date: July 27, 2026
To: Members of the Economic Development Authority
From: Emery John, Interim Program Coordinator
Title
Loon Liquors Subordination of Mortgage
Body
Action Requested:
Consider a motion to authorize execution of subordination agreement.
Summary Report:
In November 2024 and March 2025, the EDA authorized two loans ($200,000 respectively) to Loon Liquors LLC to facilitate their expansion into 115 5th St. W.
In review of the loans, documentation, and process. The City Attorney has asked that the EDA affirm the intent to have the EDA loan be in the third position on the mortgage for the 2024 loan. Staff have attached the subordination agreement. The EDA is in the third position with the building as collateral for the 2024 loan. The EDA is in the first position with equipment as the collateral for the 2025 loan. The EDA also holds personal guarantees from Mark Schiller and Simeon Rossi of Loon Liquors for both loans.
This Subordination Agreement documentation is now required because Loon’s bridge loan is being transitioned to an SBA 504 holding group. The execution of this document is needed for their closing on Wednesday, July 29. This subordination agreement completes the initial intention of the EDA’s collateral packages.
City Plans & Policies Relevance:
N/A - finalizing previous action.
Alternative Options:
EDA does not motion to authorize execution of subordination agreement.
Financial Impacts:
This is finalizing the collateral that is articulated in our recorded mortgage, so the financial impact of this specific action is immaterial. The initial two loans were approved for a total of $400,000.
Tentative Timelines:
November 2024 - 1st Loon Loan approved at EDA
March 2025 - 2nd Loon Loan approved at EDA
July 2026 - Subordination Agreement finalized