Published January 22. 2014 4:00AM Updated January 22. 2014 11:53PM
Mystic - A Waterford man who was given $150,000 in state aid to open a burrito shop in the Mystic Factory Outlet complex and create three fast-food jobs has closed the store.
Tyler Gilbertie, who is the principal of Gilbertie's Restaurant LLC of Colchester, has also closed his other Lazy Burrito locations in Colchester and Niantic.
Gilbertie, who could not be reached to comment, received a $49,502 grant and a $100,398 loan under Gov. Dannel P. Malloy's Small Business Express Program in June 2012. At the time, the state Department of Economic and Community Development, which oversees the program, said the money was being used "to support smaller, family-owned businesses that are performing well and growing jobs."
DECD spokesman Jim Watson said Tuesday that the state had given all the money to Gilbertie. He said that Gilbertie has not paid back any portion of the loan, which carries a 3 percent interest rate, and last September received a one-year deferral of his loan payments until June.
DECD stated in a document that the delay is because "positive cash flow is taking longer than anticipated." Gilbertie also asked that the term of the loan be extended from five to 10 years, and the state agreed that he will have 96 months to repay the money once he begins payments.
Watson did not say if DECD is taking steps to recoup the grant money from Gilbertie, who has been the defendant in five collections and foreclosure actions in state courts over the past three years.
DECD has said the money was going to be used to for improvements to the leased building as well as for restaurant machinery and equipment, office and computer functions and working capital.
The sparsely decorated restaurant received mixed reviews, according to Internet postings. This week, chairs are stacked inside and equipment remains in the rear. A "for lease" sign is on the front.
Watson said all Business Express projects undergo a financial review prior to funding. He said an audit shows all state funds were spent appropriately. He added that of the 992 companies that have received funding to date, only nine are out of business.
The DECD's announcement of the aid in 2012 included a statement from state Rep. Linda Orange, D-Colchester, the town where the first Lazy Burrito was opened in September 2011.
"Gilberties is the definition of a family business. This injection of state funding will help this longtime local business expand and grow," the statement read.
According to Gilbertie's LinkedIn page, he has run Gilbertie's Restaurant LLC since 2009.
Orange did not respond to a list of questions The Day sent to her Tuesday regarding the funding.
State Rep. Diana Urban, D-North Stonington, whose district includes Mystic, said she is very familiar with the Small Business Express Program but was not involved in obtaining aid for the Lazy Burrito.
Urban said that when she helped AB Powell Woodworks, a Pawcatuck firm that makes fine cabinetry, get aid from the program last year so it could move into larger quarters on Route 1, it was a demanding process in which the owners had to answer numerous questions. Since receiving $60,000, she said the business has hired three young full-time workers who are being taught the skill of making custom cabinetry, which she said will allow them to earn good salaries.
She added that unlike the Lazy Burrito, there was no loan money available for AB Powell.
"I wish I could have gotten them burrito money," she said.
Urban expressed skepticism about giving money to fast-food operations to create low-paying jobs.
"I'm a huge fan of small business and the impact they have on the economy and their communities, but money for a burrito joint?" she asked.
Urban theorized that Gilbertie's got the money just after the Business Express program began. At that time, she said there was a lot of exuberance about the program, which was "flush with cash" and looking to give it away.