Mast General Store's purchase of the old Lourie's building on Main Street was helped by the offer of a 10-year, $2 million loan from Columbia officials using federal stimulus money.
Mast General will use the money to renovate the building, which for more than 40 years housed the Lourie's menswear store. The money will not be used to purchase the three-story building, interim city manager Steve Gantt said.
By restoring the building, Mast General will be eligible for federal tax credits, which it can use to repay the loan, Gantt said.
City Council members have agreed to pay the interest on the loan from the property taxes generated from the building.
"We're trying to figure a way to help them," Columbia Mayor Bob Coble said. "We've been looking for that retail boost. Mast General, if you look at Greenville and other cities in North Carolina, has certainly done that."
Mast General Store will be the first major retailer on Main Street since three department stores closed in the early 1990s. Mast is known for its combination of cutting-edge outdoor gear and old-fashioned candy and toys.
City officials have had trouble making Main Street a major retail and commercial corridor. The two-lane street is pedestrian-friendly and has plenty of lunch and some dinner offerings. And the Nickelodeon arthouse theater is moving in next door to Lourie's.
But while the area has added three office towers recently, SCANA, the state's only Fortune 500 company, left Main Street in September for a corporate campus in Cayce.
The Lourie's building itself was difficult to sell. The building was first listed at $2.5 million in 2007 before being dropped to $799,000 for an auction in May that didn't attract any bids.
Mast General's purchase price is unknown, but this summer, real estate officials said it was between $799,000 and $1 million.
City taxpayers have invested $4.7 million in water, sewer and streetscaping improvements on the part of Main Street that includes the Lourie's property. City Council members believe the Mast General Store is the payoff for those years of inconvenient construction.
The Mast General money comes from a recovery zone facility bond, part of a $787 billion federal stimulus package President Barack Obama signed in February.
The money was distributed to cities and counties with populations of at least 100,000. Local governments cannot use the money themselves but must loan it to private companies.
"We probably would not have been able to use it had it not been for Mast General," Gantt said. "It doesn't cost us anything. They get good money at no taxes - and we'll pay the interest, and we get the building put back like it was originally, and we get an anchor back on Main Street we think will really revitalize that whole block."
Columbia received a recovery zone facility bond for $958,000. Council members hope Richland County will pitch in the other $1 million.
If not, the $2 million loan will have to be scaled back, Gantt said. Coble said he's confident Mast General Store will not back out of the deal if that happens.
Coble plans to meet with Richland County Council chairman Paul Livingston next week to discuss the deal.
Attempts to reach Livingston and Mast officials were unsuccessful.
Columbia City Council members voted 4-0 last week to authorize the loan after discussing it in a session that was closed to the public.
Council members Kirkman Finlay, Belinda Gergel and Daniel Rickenmann were absent from the meeting and did not vote. However, council members are allowed to take action if a majority is present.