Admiral Hotel receives state's first SBA refinancing loan

A downtown Rehoboth Beach hotel has been awarded a $6.2 million loan under a new federal program that aims at getting more people to work.

The Admiral Hotel in Rehoboth Beach is the first business in the state to receive a 504 real estate refinancing loan from the U.S. Small Business Administration made possible under the 2010 Small Business Jobs Act.

Admiral owners Chad and Elyse Moore will use the loan to upgrade and rebrand the hotel. The rooms will be completely remodeled with all new furniture, new bathrooms and fixtures. Chad Moore said the stairwells will be repainted and the exterior will be upgraded with new awnings and signs.

The hotel definitely needs some sprucing up, he said.

"It needs a hug. So we're going to give it a hug," Moore said. "Our idea is to take the already vibrant street of Baltimore Avenue in Rehoboth and just try to add to that. If we can bring more people into Rehoboth, it will benefit everyone else around us."

The Admiral received two loans from the SBA to help with the renovations: $6.2 million through the new 504 loan and $1.7 million from a guaranteed 7(a) loan, which will be used for additional renovations. The two loans combine for a total of $7.9 million.

Under the 504 program, the Admiral has refinanced its existing mortgage through Fulton Bank into a 20-year fixed-rate loan.

Fulton Bank president Randy Taylor said, "It benefits everybody. It's good business for us. They're saving a tremendous amount of money, probably close to $100,000 a year in interest that they can put back into the community. It's a win-win."

Taylor says he hopes Fulton can do more 504 loans in the future as the program provides access to capital for small businesses and is a low-risk loan for the bank.

SBA regional administrator John Shoraka said generally 504 loans were for new businesses. But under the Small Business Jobs Act, existing businesses could refinance their loans to decrease their payments and increase cash flow to encourage new hiring. Moore said the loan will help save 25 existing hotel jobs and likely create 10 new jobs, in addition to work for contractors to renovate the hotel.

Sen. Chris Coons said of the loan, "It's going to put to work dozens of local contractors who are going to be able to come here and refurbish the hotel, redo the rooms and redo a lot of the capital infrastructure."

The Small Business Jobs Act – not to be confused with the recent American Jobs Act – was specifically targeted to help small businesses grow through various financing plans, Coons said. The provision allowing businesses to refinance is expected to expire next year, although Coons said he will work to extend the provision.

"We aren't recovering fast enough, and I think we need to continue those partnerships between the federal government, community banks and small businesses that are effective and are showing impact," he said.

The Moores are third-generation natives of Rehoboth and also own an interest in the Bellmoor Inn on Christian Street.

"We spend a lot of time trying to put heads in beds," Chad Moore said.

Moore said the new name has not been announced yet but will incorporate the Admiral name. He said most of the renovations should be complete by the end of the year, although all the work will not be done until May.

As for being the first in Delaware to get the new 504 loan, Moore said, "It's kind of an honor to be the first person to have it. I'm hopeful others will take advantage of it."