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Wednesday, 23 May 2012 20:25

Cherokee’s top coffee spot taken over after loan, lease default

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Regular coffee connoisseurs in Cherokee may have noticed a slight change in their popular downtown coffeehouse.

The Sequoyah Fund, an economic development nonprofit that makes small business loans, is now running what was formerly Tribal Grounds under the name Cherokee Coffee Shop.

Tribal Grounds was foreclosed on after former owner Natalie Smith neglected to pay the rent for the business. The Sequoyah Fund, which lent Smith money for the lease and start-up costs, took over the shop and decided to keep it open during the foreclosure process rather than leave a vacant building in the middle of the downtown district.

“It’s in the best interest to keep the business open,” said Ray Rose, a Sequoyah Fund board member who is running the coffee shop for now. “We were also requested by the tribal business community to keep it open.”

Part of the collateral for the loan from the Fund was Smith’s business. So when Smith did not pay the rent and foreclosure documents were filed, the business came under the auspices of The Sequoyah Fund. The nonprofit then hopes to sell the business, which is currently housed in a tribally owned building.

“There are people lined up. There is significant interest,” Rose said.

The coffeehouse was closed for one week while the Fund transferred the business to its name and underwent the required inspections.

“We were able to do that in a week, which is incredible,” Rose said.

Leaders with the Sequoyah Fund declined to provide details of the loans granted to Smith.

“I think you are pushing the limit there on things that are confidential,” said Rose. Rose did say that it had been a “significant amount of time” since Smith had last made a payment toward the lease.

Michell Hicks, chief of the Eastern Band of Cherokee Indians, also abstained from divulging any particulars about the loans or any other debts owed but indicated that the amount is considerable and more than any potential buyer might want to take on.

“I am not sure if they (Sequoyah Fund) will find anyone to take on the amount of debt,” Hicks said. “They may have to accept cents on the dollar.”

A lawsuit against the tribe may also result from the foreclosure. The tribe owned the building that Smith rented for her coffeehouse.

“There have been allegations (but) nothing’s been filed at this point,” Hicks said.

Hicks said he is glad that the coffee shop will remain open, at least for now, calling it “a business that Cherokee desperately needs.”

Attempts to contact Smith were unsuccessful. However, she released a statement to WLOS two weeks ago.

“I acknowledge there have been financial difficulties with my business and I have diligently pursed resolutions to those difficulties. Unfortunately, I have not been able to meet the demands of the Business Committee and the Sequoyah Fund,” said Smith in the statement. “The (Bureau of Indian Affairs) and the Tribe have changed the locks on my business over my express objections. This situation continues to develop, and I am seeking legal assistance.”

With the exception of the coffeehouse in Harrah’s Cherokee Casino and Hotel, Tribal Grounds is the only coffee shop in the Cherokee area. The shop was recently honored with the distinction of having its coffee grounds served and sold at The Smithsonian Museum of the American Indian in Washington, D.C.

The Sequoyah Fund is a nonprofit that loans money for business ventures and provides training and other resources to companies on the Qualla Boundary and in the seven western counties. The regional loan program has used casino dollars to help provide training and technical assistance to more than 1,000 individuals and extended more than 135 loans totaling almost $4.6 million since 2001.

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