Manager buys Paulina Market
(Crain's) — The manager of the Paulina Market has purchased the North Side butcher shop from its longtime owners, paying $1.95 million for a Lincoln Avenue store known for its aged steaks and homemade sausages.
Bill Begale, who has worked at the store since 1984 — except for a five-year stint at a cheese manufacturer — bought the business and the real estate from the sons of Sigmund Lekan, who founded the company in 1949.
Mr. Begale bought the business from Jerome and Ray Lekan in 2006, leasing the store at 3501 N. Lincoln Ave. He completed the deal last month by acquiring the 10,000-square-foot building.
"It is a big step, but I'd have to pay just about that amount in rent," says Mr. Begale, 50, a Northwest Side native.
He financed the deal with a $787,000 loan guaranteed by the U.S. Small Business Administration and a $975,000 loan from Bank of America, property records show.
"I'll be paying on it for a long time," he says. He declines to say how much he paid for the business, but says the loan from the Lekans to finance that part of the deal is paid off.
SBA guarantees have long been a source of financing for fledgling companies that couldn't get loans elsewhere. But as the credit crisis forced banks to pull back on making new loans, the volume of SBA-backed loans nationwide fell to a rate of about $10 billion a year, compared to the typical pace of about $20 billion a year, the U.S. Treasury Department said in March.
"It is just a bear to finance transactions these days, at every turn," says Leslie Lepow, a partner in the Washington, D.C., office of law firm Jenner & Block LLP, who represents government contractors seeking SBA-guaranteed loans. "You can get financing, but it is like swimming through molasses."
Paulina Market's sales this year are about the same as last year, Mr. Begale says, although he declines to disclose the amount. But he increased his advertising in February through April.
"I focused all my advertising on those three months because it's traditionally slow," he says. "I didn't know this was going to happen with the economy."
The market, which was remodeled in 2007, has been in its current location since for about 25 years. The company has about 20 full-time employees, including 15 butchers, Mr. Begale says. Ray Lekan still works at the butcher shop on a regularly basis, while his brother comes in before holidays, when the store is the busiest, Mr. Begale says.
"I really haven't changed much," he says. "Everything's working, why change it?"
