SBA action key to new downtown Cedar Rapids eatery

A new tenant for the former Blend restaurant location in downtown Cedar Rapids may have to wait awhile to sign a lease.

Steve Emerson, who owns the building that housed the popular eatery at 221 Second Ave. SE, said the U.S. Small Business Administration has a 60-day “cure” period to bring rent payments current on the lease.

“When the owners of the Blend defaulted on the lease, I had to give the SBA a 60-day notice,” Emerson said. “During that period, the SBA has the right to take over the lease, cure the default, and the lease would still be valid.”

Blend closed on Jan. 7, a victim of too much debt and a slow local economy after the June 2008 flood. The restaurant had reopened Oct. 25, 2008, after sustaining significant flood damage.

Owners Andy Deutmeyer, Vic Kuper and Mark Young took on substantial debt to remodel and restore the trendy restaurant, obtaining a 4 percent loan from the SBA.

Emerson said the SBA has a first lien on all the equipment and furnishings in the restaurant because Deutmeyer, Kuper and Young used their SBA loan to purchase it.

“By all rights, the SBA owns that stuff,” Emerson said. “I'm trying to negotiate with them either to use the equipment or purchase it. If I own the equipment, I wouldn't have any problem letting someone operate a restaurant there.”

Emerson said there have been numerous inquiries from potential restaurants about the Blend location. He said a restaurant could open fairly quickly if the lease and equipment ownership issues are cleared up.

“It's already set up to go,” Emerson said. “If all you have to do is walk in, buy your food and hire your staff, that would make things run a lot smoother.”

The flood-related loss of the Paramount Theatre and Theatre Cedar Rapids, which drew many people to Blend for dinner before a show, was a factor in Blend's demise. The reopening of Theatre Cedar Rapids later this month is expected to restore some downtown night life.