PITTSBURG — A Pittsburg business owner has questioned why $300,000 was approved by the city for a new downtown cafe that she claims threatens the livelihood of her restaurant, money that the city said was given as a loan and without using taxpayer dollars.

Natalie Cooper Heredia, who said she is the owner of Lumpy’s Diner, expressed in a recent social media post that she was “furious” after learning that Pittsburg awarded the funds to Sean McCauley Investments for Lighthouse Cafe.

She claimed “taxpayer money” shouldn’t have been used to help a “direct competitor,” money she thought was intended to attract businesses that would fill a gap to bring visitors into Pittsburg’s downtown at night.

Heredia said it felt like a “slap in the face.”

Pittsburg Community and Economic Development Director Jordan Davis said the city council approved the $300,000 loan in June 2024.

“These are not tax dollars, these are dollars that we receive from settlements with Trans Bay Cable and Calpine industries, so no tax dollars are being expended here,” Davis said. “We’ve used PPC (Pittsburg Power Company) to issue grants for different projects in the past, including for one of the hotels under construction and work that needed to be done at the California Theater and for Lumpy’s.”

Concerns raised by Heredia prompted the Pittsburg Chamber of Commerce to act. The chamber said it filed a Public Records Act request with the city and the Pittsburg Power Company to obtain records detailing the source, terms, and approval process for the funding associated with the new Lighthouse Cafe project.

“We are committed to gathering this information to advocate effectively for transparent processes and fair treatment for our entire business community,” the chamber said in a responding social media post.

According to the city, Sean McCauley Investments had purchased the site for Lighthouse Cafe from the city in 2022 and has invested “significant funding” to convert a portion of the space.

“Unfortunately, when that building was constructed, it did not have the proper mechanical installations for a ventilation hood, and it was very expensive for ventilation hoods to be put in,” Davis told this news organization. “So, the city offered to provide Sean with a loan.”

The $300,000 loan was allocated for energy efficiency upgrades. The agreement also states that Sean McCauley Investments will be required to “construct, cause the construction of, or lease space” to at least two full-service restaurants.

“The loan principal will be repayable December 31, 2034; however, the loan principal shall be reduced each year by the collective sales taxes generated by the businesses located within,” noted a city staff report.

Davis said portions of the $300,000 loan have yet to be disbursed because construction work is ongoing at the site.

In 2018, Pittsburg provided a $348,000 loan to Lumpy’s Diner with a 5% interest to allow Heredia to buy the building from the city. The loan was paid off three years later, said Davis.

After claiming a city official had made a statement that included what she said was misinformation, Heredia declined to provide further comment on the situation with this news organization.