Evanston’s only distillery — FEW Spirits — is seeking a $250,000 loan from the city to finance its expansion.

The craft distillery’s owner Paul Hletko, in a memo to the city’s Economic Development Committee, says the business, founded in 2010, is growing rapidly, with distribution to 12 states and two Canadian provinces.

And he says the firm has been winning awards, with its Barrel Aged Gin now the highest rated in the world.

Hletko uses the location of the business in the one-time home of the prohibition movement as part of its marketing appeal and says he wants to expand and add more employees here.

He’s also hoping to grow tourist visits to the distillery’s production site on Chicago Avenue.

But he says that because of its rapid pace of growth it’s having a hard time qualifying for sufficient commercial bank financing, which is based on a firm’s historical performance.

The city’s economic development division manager, Johanna Nyden, says in a memo that if the committee supports the loan idea, it could be funded through the city’s business attraction, expansion and investment fund.

The committee is scheduled to discuss the proposal at its meeting tonight at 7:30 p.m. at the police outpost, 633 Howard St.

Bill Smith is the editor and publisher of Evanston Now.

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  1. Here we go again…

    …another business seeks to expand and grow in Evanston and comes asking the City to provide it with financing. Didn't we hear this same story before? Why is it that business owners are asking for money from the City of Evanston instead of local banks? Last time i drove around Evanston i noticed several banks still in business. With interest rates so low, keeping idle cash in their vaults doesn't make good business sense. Instead, the banks should be lending money to growing businesses like FEW. So what am I missing? Before a loan is made there should be full disclosure and transparency made to taxpayers regarding the financial health of FEW, its business plan, and the terms of the loan.

  2. Why not?

    Given what the city doles out in TIFs, Loans, Grants and Gifts I see no reason to refuse this request. FEW is a highly successful, local business and deserves a loan as much as (probably more than) any other business. This, of course, after the city's due diligence as the "bank".

  3. Not feasible for commerical loan?

    Another business looks for a more desirable loan from the City?  If a for-profit business cannot secure a commercial loan or line of credit, then why should the tax payers assume the risky loan?

  4. An alternative suggestion (or two)

    Here's an idea, if such taxpayer-funded aid is to be provided: any business that seeks aid from the City should be required to indicate how many jobs such assistance will create, and commit to hire some percentage of Evanston residents to fill those jobs. The City must then follow up regularly to see if that commitment is being fulfilled. If the aid is provided but the business fails to meet those targets, then there should be some penalty; if the aid is in the form of a loan, for instance, the interest rates should increase. Agreements of this sort are not uncommon in other municipalities. If, of course, the business can demonstrate that no qualified applicants from Evanston are available, the targets could be adjusted. But such information would also be helpful to allow the City and social service agencies to know what jobs are out there, and what sort of training might be required to ensure job-seekers here can fill them.

    One of the principal arguments for aid like this, coming from the City and from the businesses who seek it, is that it will help create jobs here in Evanston. Sometimes that is inarguably true (Trader Joe's, for instance, as a new operation obviously brought jobs to Evanston) but with going concerns it is less clear that financial aid from the City will lead to new job creation (Ward Manufacturing, for instance, which hired few if any new workers after receiving a substantial sum from the City). But in any event little focus is paid to whether or not any new jobs created are going to Evanston residents (there was no requirement, for instance, in the Trader Joe's agreement that the new store hire anyone from Evanston). 

    With unemployment climbing again in our city, it seems incumbent upon City officials to do everything possible to ensure that our residents have all possible opportunities open to them.  Businesses that take no aid from the City, of course, are free to hire without regard to local circumstances. But those who seek taxpayer dollars to underwrite their company should be required to provide more immediate return (in the form of jobs) in exchange for the community's investment in their enterprise.

    Because if we are really concerned with job creation here, and shoring up those parts of our City that are struggling, we could instead consider using that $250,000 to hire unemployed Evanstonians to do some necessary work around the City. We could extend the Mayor’s Summer Youth Employment Program to make it a year-round operation. As a taxpayer, I’d argue that would be a better investment.

  5. No no no no no!

    No tax dollars committed to private ventures. Period.  Full stop.

    1.  TIF.  To be clear, TIF is not tax payer dollars – they are the incremental increase AFTER THE DEVELOPMENT IS COMPLETED; but for a new development there wouldnt be any incremental increase.  Get it?

    2.  Loans Grants Gifts:  by these I assume you mean sales tax deals thereby lowering the businesses burden.  These are only approved when a business has proven to be stable and profitable.  FEW is neither at this time.  That is the reason why they are asking for a quarter million dollars = they don't have the revenue to qualify for a commerical loan.

    3.  Loan in exchange for hiring quotas:  good luck getting an guarantee of that from a business that cannot secure a commercial loan or line of credit.

  6. Small business loan?

    Have they looked into an SBA loan?  Otherwise, I agree with Toni Gilpin's suggestion.

  7. Great idea!

    Since the underfunded Police and Fire Pension needs to improve returns (or reduce liabiliies), it should consider  making a straight equity or fixed income investment with an equity kicker. The payoff could be enormous considering the monumental success enjoyed by FEW (as opposed to many).

  8. I’m for it!

    This is a great business making a great product, proven through international reviews, that has worked hard over the past few years using their own resources to build a business from scratch.  In addition, the founder is a long time Evanston resident who has branded and marketed his wares with an emphasis on Evanston and its history.  Now they are asking for a loan, for which there are already funds earmarked in the budget, to expand the business, lease more real estate, hire more people and bring more visitors from around the world to Evanston.  To me this defines the sort of business our tax dollars should support.  The future of Evanston lies in te renewal of our craft busineses of which FEW is a pioneer.

    1. Lend them your money

      Cindy, if you are so enthusiastic about FEW's business, lend them YOUR money. And if you don't have a lot of extra cash go out and tell friends, neighbors and others about the wonderful prospects for FEW and get them to pony up the cash.

      If this is such a "great business making a great product, proven through international reviews" I'm sure people will be lining up out the door to not only consume their product but also to lend them money or invest equity into the business.

      That's how our country's economic system works. In the former Soviet Union, the government decided what businesses to fund. I agree with the former and strongly disagree with the latter approach.

      Yes, FEW is based in Evanston and is playing up their Evanston roots to the alderman's ear. I find it ironic that their labels appear to harken back to images of Chicago's World Fair. 🙂

      The City of Evanston should get out of the banking business and leave that to others more experienced and focused on this area.

      Remember, each and every loan made by the City of Evanston increases the risk to taxpayers.

      As I recall the City of Evanston's debt was recently downgraded. I agree with Economic Development efforts that facilitate business creation and expansion in Evanston, highlighting our city's access to transportation, educated workforce, proximity to Northwestern University and Chicago.

      I do not agree with subsized loans, giving money to private businesses, and exposing taxpayers to significant balance sheet risk.

    2. I’m not for it

      By your criteria, there are over a hundred businesses that qualify for a guaranteed City loan or grant.  If all of them asked for something similar to FEW, it would bankrupt the City overnight.

      Commercial loans and lines of credit have existed for hundreds of years and still work.  FEW should have several commercial banking relationships.  The City should assist with zoning and licensing, not banking.

  9. Only if a free bottle of booze goes to every tax payer

    I'm going to need one if I continue living in this town.

    Cheers to a city council that spends like drunken sailors.



    1. hic up

      Right on the button!  They probably already promised the mayor, city manager, and council all the bottles they need to cut a check.

  10. No one deserves a loan

    No one deserves a loan. This business needs to do what all the other businesses do. Go to a bank in the city and get their money. Tell your story walking. As taxpayer, I do not think that the money should go to these niche businesses. To tell the truth I have never heard of them.

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