HomeMy WebLinkAbout01-62 Resolution No. 01-62
RESOLUTION
APPROVING LOAN UNDER THE SPECIAL BUSINESS LOAN PROGRAM
FOR BUILDING IMPROVEMENTS IN ELGIN CENTER CITY
(231 Douglas Avenue)
WHEREAS, the City of Elgin and certain banks and savings and loan
institutions have established a special business loan program for
building improvement in Center City Elgin for revitalization purposes;
and
WHEREAS, John Haight and Linda Haight have submitted an application
to American United Bank and Trust Company for a loan under the special
business loan program; and
WHEREAS, American United Bank and Trust Company has approved this
loan under the special business loan program; and
WHEREAS, the loan is for the improvement of a type of business
located in an area of the Center City of Elgin which meets the
eligibility requirements of the special business loan program; and
WHEREAS, the loan application meets the general requirements
concerning type of financing, contractor bids of the special loan
program; and
WHEREAS, the loan applicants meet the qualifying standards as set
out in the special business loan program; and
WHEREAS, it is determined that funds are available for the loan, the
development plans are compatible with the Center City development plans,
and the application is in adherence to the objectives and regulations of
the program.
NOW, THEREFORE, IT IS RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ELGIN, ILLINOIS, that Joyce A. Parker, City Manager, and Dolonna Mecum,
City Clerk, are hereby authorized to approve the special business loan
agreement as set forth in the loan approval of American United Bank and
Trust Company attached hereto and made a part hereof by reference, and
to make monthly interest payments in accordance with the terms of the
agreement so long as the borrower continues to make regularly scheduled
loan payments .
s/ Ed Schock
Ed Schock, Mayor
Presented: March 14 , 2001
Adopted: March 14 , 2001
Omnibus Vote : Yeas : 6 Nays : 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
CITY OF ELGIN CENTER CITY SPECIAL
BUSINESS LOAN AGREEMENT
This Agreement made and entered into on this AoT/Lday of
y 4 !C/4 2001, by and between the City of Elgin, Illinois, a
municipal corporation, (hereinafter referred to as the "City" ) ,
and John and Linda Haight (hereinafter referred to as the
"Owner" ) ,
WHEREAS, the City has established a City of Elgin Center
City Special Business Loan for building improvements in the
Center City area in an effort to stimulate expansion,
reinvestment and business retention, a copy of such Center City
Special Business Loan Program for building improvements being
attached hereto and made a part hereof by reference as Exhibit
A (hereinafter referred to as the "Program" ) ; and
WHEREAS, pursuant to the Program, the City would pay a
portion of the financing costs for eligible building
improvements, and
WHEREAS, Owner is the owner of the property commonly known
as 231 Douglas Avenue, Elgin, Illinois, (hereinafter referred
to as the "Subject Property" ) which is located in the Center
City area as described in Exhibit A hereto; and
WHEREAS, Owner has applied for and obtained approval for a
buil
ding
loan agreement to finance the cost of the proposed g
improvements on the subject property, a copy of the subject
loan agreement being attached hereto and made a part hereof by •
reference as Exhibit B (hereinafter referred to as the "Subject
Loan Agreement" ) ; and
•
WHEREAS, Owner has completed an application for
participation in the subject Program which identifies the
proposed improvements to the Subject Property, a copy of
Owner ' s application for participation in the Subject Program
being attached hereto and made a part hereof by reference as
Exhibit C .
NOW, THEREFORE, for and in consideration of the mutual
promises, covenants and undertakings contained herein, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows :
1 . That the foregoing recitals are hereby incorporated
into this agreement in their entirety.
2 . That Owner ' s application for participation in the
Program is hereby approved.
3 . That as long as the Owner continues to make regularly
scheduled loan payments on the Subject Loan Agreement and
otherwise complies with the terms of this agreement the City
agrees to pay an interest subsidy on the Subject Loan Agreement
as described in this paragraph. In. such event , the City agrees
to pay an interest subsidy on the Subject Loan Agreement
whereby the City agrees to pay to the lender on a monthly basis
for the 120 month term of the Subject Loan Agreement the
difference between the annual interest rate of the Subject Loan
Agreement , i . e . one (1%) percent over prime rate floating but
not to exceed fourteen (14%) percent , and six (6%) percent
which is to be paid by the Owner.
-2-
For example, if the current annual interest of the Subject Loan
Agreement is ten (10%) percent the City would pay four (4%)
percent interest to the lender monthly and the Owner would pay
principal and six (6%) percent interest to the lender monthly.
In no event shall the interest rate exceed fourteen (14%)
percent . In no event shall the total loan amount exceed
$150 , 000 . The Owner shall make all other principal and
interest payments and all other payments on the Subject Loan
Agreement . It is expressly agreed and understood that the City
is not and shall not be deemed to be a party to the Subject
Loan Agreement or an obligor thereunder. The City' s agreement
to make interest payments as provided in this paragraph may not
be relied upon or enforced by any other party including but not
limited to the lender in the Subject Loan Agreement or any
successor or assign thereof .
4 . That the terms, requirements and conditions of the
Program as set forth in Exhibit A hereto are hereby
incorporated into this agreement in their entirety. The City' s
obligations under this agreement including but not limited to
the City' s obligations to make continued interest payments are
subject to Owner' s ongoing compliance with all terms and
requirements of the Program and this agreement.
5 . That the Owner agrees to complete the improvements to
the subject property as set forth in Exhibit C hereto on or
before December 31, 2001 . In the event Owner fails to complete
the work in accordance with the terms of this agreement or
otherwise breaches the terms of this agreement, the City may
-3-
terminate this agreement upon written notice of breach and
termination to Owner, and any and all financial or other
obligations on the part of the City shall cease and become null
and void.
6 . That upon completion of the improvements, and for a
period of five (5) years thereafter, Owner shall properly
maintain the improvements in their finished form, without
alteration or change thereto.
7 . That nothing herein is intended to limit, restrict or
prohibit the Owner from undertaking other work in or about the
Subject Property which is unrelated to the improvements
provided for in this agreement .
8 . That this agreement may not be assigned without the
prior written consent of the City.
9 . That the Owner hereby holds harmless and indemnifies
the City from and against any and all causes of actions, suits,
claims for damages and any and all other liability which may
arise out of or in connection with the proposed improvements or
other work at the Subject Property or with Owners or Owners
agents, employees, contractors and permitted assigns negligent
performance of anyof the terms of this agreement .
g
10 . That this agreement shall not be construed to create
a partnership, joint venture or employment relationship between
the parties hereto.
11 . Owner shall also pay when due all other obligations
for the subject property including but not limited to payments
on any other loans, real estate taxes and insurance .
-4-
12 . That this agreement shall be subject to and governed
by the laws of the State of Illinois . The parties hereto agree
that venue for any and all actions which may be brought by each
and either of them to enforce the provisions of this agreement
shall be in Kane County, Illinois .
13 . That the terms of this agreement shall be severable .
In the event that any of the terms or provisions of this
agreement are deemed to be void or otherwise unenforceable for
any reason, the remainder of this agreement shall remain in
full force and effect .
14 . That notices regarding in this agreement shall be
sent to the parties at the following addresses :
To : City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
Attention: City Manager (with a copy to
Corporation Counsel)
To : John and Linda Haight
Owner' s Name
231 Douglas Avenue
Address
Elgin, IL 60120
City, State, Zip Code
847-888-1155
Telephone Number
231 Douglas Avenue
Property Location
-5-
Ownership Interest
IN WITNESS WHEREOF, the parties hereto have entered
into and executed this agreement the day and year first written
above.
CITY F ELGIN OWNER
By:
Y'
J ce Parker C ty Manager
Attest :
1)-431-v•-a \-
Dolonna Mecum, City t~Clerk
-6-
•
•
CITY OF ELGIN
Center City Special Business Loan Program
for Building Improvements
PURPOSE STATEMENT :
The City of Elgin and the Elgin financial institutions have estab-
lished a special loan program for building improvements in center
city Elgin in an effort to stimulate expansion, reinvestment and
business retention .
LOAN TERMS :
Interest Rate : 6% paid by borrower
Term of Loan : 10 year amortization
Collateral : First or Second mortgage on
property
Maximum Loan: Up to $ 150 , 000 per building project
Purpose of Loan: Loan proceeds must be used for
building improvements ( interior &
exterior)
City of Elgin pays additional
interest to lender monthly at P• +
1% less 6% paid by borrower_
Ceiling 14% .
Monthly Payment : Separate bills sent to borrower
( for principal payment plus 6%
interest) and to City ( for
additional interest between 6% and
P + 1%)
ELIGIBILITY REQUIREMENTS :
To be eligible to apply for this special loan program, the applying
business must satisfy both of the following criteria :
Geographic : The business must be located in center city
1 .
Elgin, in the areas outlined in Appendix A.
2 . Type of Business : The business must be engaged in
retailing, wholesaling, distribution, professional services
and certain other types of general commercial lines of
business as described in Appendix B .
•
GENERAL REQUIREMENTS :
1 . Loan proceeds must be used strictly for commercial building
improvements . This program does not include financing for
working capital, equipment, furniture or other purposes not
involving building improvements .
2 . Building improvements must be done by an independent
contractor. Agreement with contractor must be supported
by two different contractor bids .
41
•
•
QUALIFYING STANDARDS :
1 . Applicant business and owner must have an acceptable
credit history with a record of timely loan payments .
2 . Business profits and cash flow must be sufficient to
support loan payments in accordance with the customary
loan (with the loan to value ratio not to exceed 75% to
80% ) unless other collateral or financial strength is
provided) .
•APPLICATION PROCESS :
1 . Eligible businesses should complete the loan program
application form and submit it to the bank or savings and
loan official that normally handles their account .
2 . Once the loan is conditionally approved and structured by
the lending institution, the lender shall complete a loan
proposal for submission to the City of Elgin for final
approval .
• 3 . Approval by the City of Elgin will be conditioned upon ( 1 )
available funds , ( 2 ) compatibility with Center City devel-
opment plans and ( 3 ) adherence to the objectives and regu-
lations of the program.
4 . The lending institution and business applicant may elect to
proceed with a conventional market rate loan in the event
that the City of Elgin denies the special loan program
application.
SUPPLEMENTAL LOAN AMOUNTS :
If a financial institution approves subsequent increases in the
•
original loan amount approved for a project under this program,
application can be made for an interest subsidy on the increment .
Provision of the subsidy is subject to approval by the City of Elgin.
• The City of Elgin is under no obligation to provide benefit beyond
that previously approved .
ADDITIONAL TERMS AND CONDITIONS :
1 . The interest rate ceiling shall be 14% , at which point the
City will be paying 8% and the borrower 6% .
•2 . The City shall make monthly interest payments so long as
the borrower continues to make the regular scheduledloanlso
payments . If the borrower, fails to pay, the City ln the also
cease paying. If the borrower resumes paying,
ty
will resume paying.
• BUSLOANP . ROG/TEXT081/NEWCENTU. RY
•
•
•
•
•
Appendix A
PROGRAM TARGET AREA
Geographic Area/Location:
Businesses and organizations located in the following districts
may be eligible for loans provided that the proposed improve-
ments are consistent with the Center City development goals for
their respective district and the area is not targeted for re-
development . Districts are defined by the Center City Master
Plan .
1 , Commercial Core .
2 . Gateway - west side of State Street .
3 . State Street Corridor - west of State street north to
Kimball/Lawrence .
4 . Civic Center/Cultural .
5 . Transition.
6 . Hill too .
•
•
•
PROGTARG.ET/TEXT081/NEWCENTU.RY
4 '
Appendix B
STANDARD INDUSTRIAL CLASSIFICATION CODE
( 1987 Manual)
Major Industry Industry
Group Group
523 Paint, glass and wallpaper stores
525 Hardware stores
53 General merchandise stores
544 Candy, nuts , confectionary
545 Dairy products
546 Retail bakeries
549 Except for poultry dealers
56 Apparel and accessory stores
57 Home furniture, furnishings and
equipment stores
58 Eating and drinking places
591 Drug stores and proprietary stores
593 Antique stores only
• 594 Miscellaneous shopping goods stores
599 Retail stores , not elsewhere classified
60 Depository Institutions
61 Non-depository credit institutions
62 Security and commodity brokers , dealers ,
exchanges and services
63 Insurance carriers
64 Insurance agents , brokers and service
65 Real estate
67 Holding and other investment offices
7219 Laundry and garment services , not elsewhere
classified
722 Photographic studios , portrait
723 Beauty shops
724 Barber shops
725 Shoe repair shops and shoe shine parlors
726 Funeral service and crematories
729 Miscellaneous personal services
73 Business services
753 Automotive repair shops
78 Motion pictures
79 Amusement and recreational services
80 Health services , except for industry group
809
81 Legal Services
824 Vocational schools
829 Schools and educational services , not elsewhere
classified
841 Museums and art galleries
86 Membership organizations
87 Engineering, accounting, research, management
and related services
CENTER.CTY/NCPBOAR.D
• ejq
-.a-
APPLICATION FOR
CITY OF ELGIN •
•
CENTER CITY SPECIAL BUSINESS LOAN PROGRAM
Date : •
. Loan Amount Requested: $ Total Project Cost: $
Company Name : •
Address :
Phone :
Owner ' s Name( s ) :
Type of Business :
Purpose of Loan:
Does this loan represent an addition to a loan previously approved
for this project? YES NO
If yes , please indicate original amount, date approved and total loan
amount with proposed increment.
Original loan approved : $
Date Approved: •
. Total loan with proposed increment: $
BREAKDOWN OF PROJECT
AMOUNT • CONTRACTOR DESCRIPTION OF WORK
1 $
2 . $
3 . • $
4 . $
BU SLOANA. PPL/TEXT081/NEWCENTU. RY OZ)
• OTHER CONTRACTOR BIDS OBTAINED
DESCRIPTION OF PROPERTY:
( Size & Description)
APPRAISED VALUE : •
OWNER IN TITLE :
EXISTING MORTGAGE
ON PROPERTY :
• OTHER INFORMATION REQUIRED INITIALLY:
1 . Business Year end Financial Statements - last two years .
2 . Business Interim Financial Statement - current year-to-date .
3 . Personal Financial Statement - current.
4 . Copy of Contractor Estimates .
5 . Corporate and/or Personal Tax Returns may be required.
6 . Appraisal of property may be required.
. The undersigned applicant hereby certifies that the loan funds
obtained shall be used for the purposes outlined in this application.
DATE Applicant Business
BY:
•
Owner
Please deliver this completed application to the bank or savingsand
loan official of your choice . They will process your credit applica-
tion
and submit a loan proposal to the City of Elgin for final
approval .
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APPLICATION FOR '
"'%11
CITY OF ELGIN • yY
CENTER CITY SPECIAL BUSINESS LOAN PROGRAlM
Date : 1 //i /c., I
•
Loan Amount Requested: $ /5 , oo o Total Project Cost: $ foe , 400 £50N64
Company Name : :re)I-1 "1 HA, G1nT
Address : l(of`v SYme/-fp.,,ry SAY* - c.. G . ,..1
Phone : ?1•17 - IMES - / 1 S
Owner ' s Name( s ) : ...._To /4—I I-I,41 6-14
Type of Business : (.,J0c01.....)0Ri<)^/6 f2L.4c- n" "
Sf' >Z65N/412.)
gg I-1148 O (: 3l Docl6Z // S (` LG /t-1
Purpose of Loan: r
Does this loan represent an addition to a loan previously approved
for this project? YES NO0
If yes , please indicate original amount, date approved and total loan
amount with proposed increment.
Original loan approved: $
Date Approved:
•
• Total loan with proposed increment:$
•
• BREAKDOWN OF PROJECT .
AMOUNT • CONTRACTOR DESCRIPTION OF WORK
1 . $ I.)- , Nov i_.0 CM L S NFL ,cA,.(f..'/4-�- I fL-/-i rl n!6 ,'. A i i2 co,.a D/i i 0", ./G
2 _ co 0 A,2u-o7-:c.i9 fzSrfec.i7 lLL6 LT-JZ , LA '-- a ' ton,../6
''�`\ TuckPo....,>,..,G /
3 . S I ! ' 6 O 0 L.- . . 13(1iLLi jr Or.1 TCJ C.f"C PO/i., ri ,� V 1
4 . $ 5 , oo a i3i1c. , rr�; IL5 „ .;1? lsJ/r1DVcJ 1Q. PLAea.nA / 7'
STo,217... FA.oivir
BUSLOANA. PPL/TEXT081/NEWCENTU.RY
• OTHER CONTRACTOR BIDS OBTAINED
I r
(�,Zcrrr , >,Lc..7 $.S:i.,i'itT/ ) 16- N/ U/�
i—f o 0 0 - /+ /�
e C�v Iq sZcN r r j c 7 5 �i 5 n t /4 7-K.- r974' ✓/r�./ G `f' 9_4 Y o
DESCRIPTION OF PROPERTY: .2 3 1 7o v U-LA 3 [ L G ' ,/ C.Jr2,gt,2 01`
( Size & Description)
• Krnr &AL. A- -r(> D tit-4-AS G r', 1 `i t'/L 1 cit T>
( APPRAISED VALUE : .200, coo-,
OWNER IN TITLE : _J o N /q
EXISTING MORTGAGE ,of
ON PROPERTY :
• OTHER INFORMATION REQUIRED INITIALLY:
1 . Business Year end Financial Statements - last two years .
2 . Business Interim Financial Statement - current year-to-date .
3 . Personal Financial Statement - current .
4 . Copy of Contractor Estimates .
5 . Corporate and/or Personal Tax Returns may be required.
6 . Appraisal of property may be required.
The undersigned applicant hereby certifies that the loan funds
obtained shall be used for the purposes outlined in this application.
DATE I/( 1 C7 ( �..1 d f- , (ir4! 6-14 T
plicant usiness
BY:
Owner
Please deliver this completed application to the bank or savings and
loan official of your choice . They will process your credit applica-
tion and submit a loan proposal to the City of Elgin for final
approval .
AmericaUnited Bank and Trust Company USA
ANITED BANK 321 W. Golf Road,Schaumburg, IL 60196
1300 E. Irving Park, Streamwood, IL 60107
(847) 882-4000
January 11, 2001
Mr. John Haight
Mrs. Linda Haight
844 Douglas Ave.
Elgin. IL 60120
Dear Mr. and Mrs. Haight,
America United Bank ("Bank") hereby agrees to make a loan subject to the following terms and conditions:
BORROWER: John Haight
Linda Haight
AMOUNT: $ 150,000.00
PURPOSE: Improvements to commercial real estate located at 231 Douglas Ave, Elgin, IL
RATE: 1% over Prime Rate floating, with the rate not to exceed 14%.
FEES: 1% ($1,500.00)plus all expenses associated with these transactions will be assumed by
the borrower.
REPAYMENT: Payments will be based on a ten year amortization calculated at the initial rate of 10%
(1% over prime rate, which is currently 9%) (365/360 basis)payable monthly. This
payment will be approximately $1,993.48.
MATURITY: Ten years from the date of funding
PREPAYMENT
PENALTY: None.
Member FDIC
•
•
COLLATERAL
DESCRIPTION: Junior mortgages and assignments of rents on the properties located at 231 Douglas Ave,
166 Symphony Way, and 844 Douglas Ave, all in Elgin, IL
INSURANCE: The borrower shall provide the Bank with appropriate fire, hazard, liability and (if
applicable) flood insurance issued in form and substance satisfactory to the Bank.
COSTS: All items required or contemplated to be furnished by the borrower hereunder shall be
furnished without cost to the Bank. The borrower agrees to pay or cause to be paid all
expenses of the Bank in connection with the loan.
LOAN
DOCUMENTATION:
Borrower shall sign and/or furnish all documents deemed necessary by the Bank. All
documents shall be in form and content acceptable to the Bank and its legal counsel.
Borrowers will have fifteen days from the date of this letter to accept or reject this
commitment. If this commitment is not accepted by the Borrowers during this period,
then it shall expire. At the time of acceptance, a $500 commitment fee shall be paid by
the Borrower and deemed to be earned by Bank and shall be non-refundable under any
circumstance. At the closing,the fee will be credited towards fees due.
This commitment is issued in reliance upon the representations, in fact, contained in your
loan application(s). In the event of either, (1) discovery by the Bank hereafter of any fact
which, if known at the date hereof, would have prompted the withholding of this
commitment; or (2) the occurrence hereafter of any change in material facts or
circumstances upon which this commitment was issued, the Bank may, solely at its
discretion, terminate this commitment without any liability for so doing.
Borrower will provide any and all documents requested by the Bank prior to and during
the term of this loan that the Bank, at its sole discretion, deems necessary to secure any
lien, cure any default, or enforce any provisions of this commitment, the note, mortgage
documents, security agreements, and any or all guarantees pertaining thereto
The obligation of the Bank to extend any credit facility to the Borrower is subject to the
completion of all documentation and review and approval of the legal counsel for the
Bank.
This letter sets forth our entire agreement with you and cannot be modified in any way
except by a future amendment, in writing, signed by you and America United Bank. This
agreement takes the place of any preliminary discussion and negotiation we have had and
supersedes any previous written agreements or understandings between America United
Bank and yourselves.
• :
•
It is understood that once the commitment has been accepted by Borrower, then Borrower
will be responsible for any and all costs associated with the transaction and incurred by
the Bank, whether or not the transaction closes. If this loan has not closed by February
28, 2001, this commitment shall expire.
AMERICA D BANK AND TRUST COMPANY USA
ohn T. Schraidt
• ssistant Vice President
Accepted:
ohn Haight
Li da Haight
cc. Mr. Ray Moller
City of Elgin
150 Dexter Ct.
Elgin, IL 60120
Via fax: 931-5610
i
0.0OF ftC'
ti Agenda Item No.
City of Elgin -- - - -
February 1, 2001
G : :4, .
TO: Mayor and Members of the City Council '
N y ni 1
,.. by�•�.�
FROM: Joyce A. Parker, City Manager
ALIVE DOWNTOWN
SUBJECT: Application for Participation in Special Business Loan
pp P
Program for Building Improvements at 231 Douglas Avenue
PURPOSE
The purpose of this memorandum is to provide information to the
City Council in order to consider subsidizing interest on a loan
for building improvements made to John and Linda Haight by American
United Bank and Trust Company.
BACKGROUND
As a partner with private financial institutions in the Special
Business Loan Program for Building Improvements, the City of Elgin
has subsidized interest on loans made to target area businesses .
At present, the City is involved in such loans made for projects
undertaken by Center City businesses .
In order to participate in the program, the applicant must seek
financing through and receive approval from a participating lending
institution, and file an application for the interest subsidy with
the City through the lender. If approved, the City will subsidize
the interest rate between 6% and Prime plus 1% (14% ceiling) for
ten years . A bill for the interest payment is sent to the City
from the lending institution.
John and Linda Haight are requesting participation in the Facade
Improvement Program for work done at 231 Douglas Avenue . The
applicant intends to do interior and exterior improvements to the
building. Proposed improvements include: HVAC, electrical,
tuckpointing, window replacement, store front exterior lighting,
signage and painting. The loan application requests an interest
subsidy on a loan totaling $150, 000 . American United is providing
the borrower the $150, 000 at an interest rate of 10 . 00% over 120
months . The borrower will be responsible for 6% interest with the
City subsidizing the remaining payments over the same time frame.
The total obligation to the City over the 120-month period is
$35, 688 .
• Special Business Loan Program Application
February 1, 2001
Page 2
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None .
FINANCIAL IMPACT
�1 t�
The City will be responsible for subsidizing interest payments over
120 months, which will total $35, 688 . Funds are available in
account number 350-0000-795 . 78-03, Commercial Rehab Loans .
MC51/
LEGAL IMPACT
An agreement will need to be prepared.
ALTERNATIVES
1 . To approve an application by John and Linda Haight to
participate in the Special Business Loan Program for Building
Improvements .
2 . To reject an application for participation in the Special
Business Loan Program for building improvements .
RECOMMENDATION
It is recommended to approve participation in the loan to John and
Linda Haight by subsidizing the interest as allowed.
R ectfully submi ted,
J ce A Parker
City Manager
RHM: sp
Attachment
41,
f � Agenda Item No. Al
City of Elgin
RaTEo��� E 111r 11
;i11111r1)
February 1, 2001 L 01"rEIl
G
TO: Mayor and Members of the City Council
N
FROM: Joyce A. Parker, City Manager
ALIVE DOWNTOWN
SUBJECT : Application for Participation in Special Business Loan
Program for Building Improvements at 231 Douglas Avenue
PURPOSE
The purpose of this memorandum is to provide information to the
City Council in order to consider subsidizing interest on a loan
for building improvements made to John and Linda Haight by American
United Bank and Trust Company.
BACKGROUND
As a partner with private financial institutions in the Special
Business Loan Program for Building Improvements, the City of Elgin
has subsidized interest on loans made to target area businesses .
At present, the City is involved in such loans made for projects
undertaken by Center City businesses .
In order to participate in the program, the applicant must seek
financing through and receive approval from a participating lending
institution, and file an application for the interest subsidy with
the City through the lender. If approved, the City will subsidize
the interest rate between 6% and Prime plus 1% (14% ceiling) for
ten years . A bill for the interest payment is sent to the City
from the lending institution.
John and Linda Haight are requesting participation in the Facade
Improvement Program for work done at 231 Douglas Avenue . The
applicant intends to do interior and exterior improvements to the
building. Proposed improvements include: HVAC, electrical,
tuckpointing, window replacement, store front exterior lighting,
signage and painting. The loan application requests an interest
subsidy on a loan totaling $150, 000 . American United is providing
the borrower the $150, 000 at an interest rate of 10 . 00% over 120
months . The borrower will be responsible for 6% interest with the
City subsidizing the remaining payments over the same time frame .
The total obligation to the City over the 120-month period is
$35, 688 .
Special Business Loan Program Application
February 1, 2001
Page 2
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None .
FINANCIAL IMPACT
The City will be responsible for subsidizing interest payments over
120 months, which will total $35, 688 . Funds are available in
account number 350-0000-795 . 78-03, Commercial Rehab Loans .
VA)61/
LEGAL IMPACT
An agreement will need to be prepared.
ALTERNATIVES
1 . To approve an application by John and Linda Haight to
participate in the Special Business Loan Program for Building
Improvements .
2 . To reject an application for participation in the Special
Business Loan Program for building improvements .
RECOMMENDATION
It is recommended to approve participation in the loan to John and
Linda Haight by subsidizing the interest as allowed.
R ectfully submi ted,
r‘-' 1&.. ----11f}-4-----'
J ce A Parker
City Manager
RHM: sp
Attachment
•
APPLICATION FOR
CITY OF ELGIN "`'
CENTER CITY SPECIAL BUSINESS LOAN PROGRAM
Date : 1 //i /0 I
Loan Amount Requested: $ /.So , 000 Total Project Cost: $ Avg , 41,0
Ets1,lNW7'k
Company Name : J 0)1-1 .J I 1211 1-ET
Address : 16 (0 SY•nP/-fo.tiitr (,,iAY a. LCs , ,..1
Phone : �fy 7 - g"iss - 1 I SS
Owner ' s Name ( s ) : _II 0 14 -J 1-I14 i C-l+T
Type of Business : ooD 1.-)O "`16.
/ IZ rc.ra c. 6.7_s 7 R,i- . 14- / I-aA►3
Purpose of Loan:
ga 1--1/413 0 1:- 2 3 / Dov64., /3S 1 (Et. Gi•-/
Does this loan represent an addition too a loan previously approved
for this project? YES 7` -::.
If yes , please indicate original amount, date approved and total loan
amount with proposed increment.
Original loan approved: $
Date Approved: •
Total loan with proposed increment: $
BREAKDOWN OF PROJECT
AMOUNT • CONTRACTOR DESCRIPTION OF WORK
1 . $ /2- WO 0 („0Gt4Cr SNP% 6.n /4.
2 . $T�_ A,2c.14,rF c.,-3 1Ls.--/ ,r.9 TIC
Yuc.ItiPo,../T1 G G
3 .
. $ I . jpC}o 1.- .k , PRric.15+ohl -rc1 G f. 190,..I r I .�•
4 . $ 55 00 a a ro_�,4 I rr._c_ s 11--s 7 0,04 7AL LI)/n/ Doc.✓ ;Q kPIA /✓M r/d r e-
S c o12� FR.oNr i
BUSLOANA. PPL/TEXT081/NEWCENTU. RY •
OTHER CONTRACTOR BIDS OBTAINED
, 7• os. L G(4 i,r/6
360o•
14000 �Z C.N T r'zc,T s T/ », A ( r 6- /ki 4
�i /.�.r O)`
DESCRIPTION OF PROPERTY: .2 3 1 Po () /�L C v2.n/1�2 6-LA S { o
( Size & Description)
APPRAISED VALUE : .400, oO c)
OWNER IN TITLE : .j o L 7 ,./ D A J-Ar 6- r-1 7�
EXISTING MORTGAGE cif
ON PROPERTY :
OTHER INFORMATION REQUIRED INITIALLY:
1 . Business Year end Financial Statements - last two years .
2 . Business Interim Financial Statement - current year-to-date .
3 . Personal Financial Statement - current .
4 . Copy of Contractor Estimates .
5 . Corporate and/or Personal Tax Returns may be required.
6 . Appraisal of property may be required.
The undersigned applicant hereby certifies that the loan funds
obtained shall be used for the purposes outlined in this application.
r II a f
DATE plicant usiness
`� J
BY:
�(/
Owner
Please deliver this completed application to the bank or savings land
ca-
loan official of your choice . They will process your credit applica-
tion and submit a loan proposal to the City of Elgin for final
approval . •
•
AmericaUnited Bank and Trust Company USA
AMERICAUNITED BANK 321 W. Golf Road,Schaumburg, IL 60196
A 1300 E. Irving Park,Streamwood, IL 60107
(847) 882-4000
January 11, 2001
Mr. John Haight
Mrs. Linda Haight
844 Douglas Ave.
Elgin, IL 60120
Dear Mr. and Mrs. Haight,
merica United Bank ("Bank") hereby agrees to make a loan subject to the following terms and conditions:
BORROWER: John Haight
Linda Haight
AMOUNT: $ 150,000.00
PURPOSE: Improvements to commercial real estate located at 231 Douglas Ave, Elgin, IL
RATE: 1% over Prime Rate floating, with the rate not to exceed 14%.
FEES: 1% ($1,500.00) plus all expenses associated with these transactions will be assumed by
the borrower.
REPAYMENT: Payments will be based on a ten year amortization calculated at the initial rate of 10%
(1% over prime rate, which is currently 9%) (365/360 basis) payable monthly. This
payment will be approximately $1,993.48.
MATURITY: Ten years from the date of funding
PREPAYMENT
'ENALTY: None.
Member FDIC
COLLATERAL
DESCRIPTION: Junior mortgages and assignments of rents on the properties located at 231 Douglas Ave,
166 Symphony Way, and 844 Douglas Ave, all in Elgin, IL
INSURANCE: The borrower shall provide the Bank with appropriate fire, hazard, liability and (if
applicable) flood insurance issued in form and substance satisfactory to the Bank.
COSTS: All items required or contemplated to be furnished by the borrower hereunder shall be
to the Bank. The borrower agrees to payor cause to be paid all
furnished without cost g
expenses of the Bank in connection with the loan.
LOAN
DOCUMENTATION:
Borrower shall sign and/or furnish all documents deemed necessary by the Bank. All
documents shall be in form and content acceptable to the Bank and its legal counsel.
Borrowers will have fifteen days from the date of this letter to accept or reject this
commitment. If this commitment is not accepted by the Borrowers during this period,
then it shall expire. At the time of acceptance, a $500 commitment fee shall be paid by
the Borrower and deemed to be earned by Bank and shall be non-refundable under any
circumstance. At the closing, the fee will be credited towards fees due.
This commitment is issued in reliance upon the representations, in fact, contained in your
loan application(s). In the event of either, (1) discovery by the Bank hereafter of any fact
which, if known at the date hereof, would have prompted the withholding of this
commitment; or (2) the occurrence hereafter of any change in material facts or
circumstances upon which this commitment was issued, the Bank may, solely at its
discretion, terminate this commitment without any liability for so doing.
Borrower will provide any and all documents requested by the Bank prior to and during
the term of this loan that the Bank, at its sole discretion, deems necessary to secure any
lien, cure any default, or enforce any provisions of this commitment, the note, mortgage
documents, security agreements, and any or all guarantees pertaining thereto
The obligation of the Bank to extend any credit facility to the Borrower is subject to the
completion of all documentation and review and approval of the legal counsel for the
Bank.
This letter sets forth our entire agreement with you and cannot be modified in any way
except by a future amendment, in writing, signed by you and America United Bank. This
agreement takes the place of any preliminary discussion and negotiation we have had and
supersedes any previous written agreements or understandings between America United
Bank and yourselves.
It is understood that once the commitment has been accepted by Borrower, then Borrower
will be responsible for any and all costs associated with the transaction and incurred by
the Bank, whether or not the transaction closes. If this loan has not closed by February
28, 2001, this commitment shall expire.
AMERICA ED BANK AND TRUST COMPANY USA
ohn T. Schraidt
ssistant Vice President
Accepted:
John Haight
Linda Haight
cc. Mr. Ray Moller
City of Elgin
150 Dexter Ct.
Elgin, IL 60120
Via fax: 931-5610