El Cajon Brewing Company struggling with bankruptcy

Business borrowed $600K from El Cajon, state

EL CAJON, Calif. - A beer business is struggling through bankruptcy despite receiving $600,000 from the state and city of El Cajon to open its doors.

The El Cajon Brewing Company was provided with the funding so it could open in October 2012, but now there is a chance it could soon go out of business.

"It is a good place. I'm in shock that they're closing," said Yenia Navarreta, who owns a hair salon and day spa one block from the brewery.

Navarreta said she's been in El Cajon for three years and is saddened to hear all that money is gone.

"It makes me sad, you know, because a lot of businesses out here need that money," said Navarreta.

El Cajon City Councilman Gary Kendrick told 10news 90 percent of the funds came from state redevelopment money. The city put up the rest -- $60,000.

"Part of the loan is forgivable and part of it has to be paid back," Kendrick said.

Kendrick said the owner has to pay back most of the $600,000. He told 10News the city will not lose money because the loan is secured by the equipment inside. He said it's worth more than the debt.

"The city could repossess the equipment and sell it on the open market or the city could lease it to the new vendor," said Kendrick.

The owner of the El Cajon Brewing Company told 10News they have 10 beers on tap and business is going well. Now, they're waiting to hear what the courts will decide.

"It's already been before the judge once and it'll be before the judge again, so we expect some sort of resolution within the next couple of months," said Kendrick.

If the company goes under, Kendrick said the city has options for the space.

"A lot of people would like to come into El Cajon and open a microbrewery or perhaps the current owner could work something out with the judge so he can continue operating," said Kendrick.

For now, the El Cajon Brewing Company told 10News they plan to stay open as long as possible.

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