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HomeMy WebLinkAbout03-326 Resolution No. 03-326 RESOLUTION ADOPTING THE CENTER CITY SPECIAL BUSINESS LOAN PROGRAM FOR BUSINESS DEVELOPMENT AND BUILDING IMPROVEMENTS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that it hereby adopts the Center City Special Business Loan Program for Business Development and Building Improvements dated November 24 , 2003 for building improvements and business development in Center City Elgin, a copy of which is attached. s/ Ed Schock Ed Schock, Mayor Presented: December 3 , 2003 Adopted: December 3 , 2003 Omnibus Vote : Yeas : 6 Nays : 0 Recorded: December 4 , 2003 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk CITY OF ELGIN Center City Special Business Loan Program PURPOSE STATEMENT: The City of Elgin and the Elgin financial institutions have established a special loan program for building improvements and business development in Center City Elgin in an effort to stimulate expansion, reinvestment and business retention. LOAN TERMS : 1 . Borrowers interest rate on their loan may not exceed 15% . 2 . The maximum loan is up to $200 , 000 per building project . 3 . The term of the loan shall be based on a ten year amortization. 4 . The interest rate for the loan must be at or above the Prime rate of interest 5 . The loan proceeds shall be used only for the acquisition or lease of operating facilities, the purchase of equipment or fixtures, space built out or inventory. 6 . Interest payments by the City shall be at the following rates payable over a period of five years : st year - 90% of first year interest costs 2nd year - 80% of second year interest costs 3rd year - 70% of third year interest costs 4th year - 60% of fourth year interest costs 5th year - 50% of fifth year interest costs Notwithstanding anything to the contrary in this loan program the maximum amount of interest payments by the City for any loan shall be in the maximum amount of $92 , 365 . 29 . 7 . Separate bill from the lending institution shall be sent to the borrower for principal payments plus the applicable interest and to the City for the applicable interest rate . 8 . The financial obligations of this agreement shall be subject to available budgeted funds . 11-24-03 ELIGIBILITY REQUIREMENTS : To be eligible to apply for this special loan program, the applying business must satisfy both of the following criteria: 1 . Geographic : The business must be located in Center City Elgin, in the areas outlined in Appendix A. 2 . Type of Business : The business must be engaged in retailing, wholesaling, distribution, professional services, technology industry and other types of general commercial and retail lines of business consistent with those business uses identified as desirable in the adopted Riverfront/Center City Master Plan. GENERAL REQUIREMENTS: 1 . This program does not include financing for furniture, standard office equipment (i .e. personal computers and related equipment) or operating capital . 2 . Building improvements must be done by an independent contractor. Agreement with contractor must be supported by two different contractor bids . 3 . Any business which is approved and is to receive benefits under this Center City Special Business Loan Program must execute a written agreement with the City in a form as directed by the City which shall include the terms necessary to comply with the provisions of the program requirements and which shall include an agreement by such business to complete building improvements within a specified time period and to thereafter remain in business at the specified location for a period of not less that three years . If the business is required to vacate the Center City location due to action directed or supported by the City, the business must relocate within the Center City in order to retain the benefits of the Business Loan Program. 4 . Participants in the Center City Special Loan Program must provide annual financial statements to the City during participation in the program. 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, savings and loan official, or other pre-approved lending program. 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 development plans, (3) adherence to the objectives and regulations of the program and (4) entry into a program agreement with the City in the form as directed by the City. 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 lending 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 : The City shall make monthly interest payments so long as the borrower continues to make the regular scheduled loan payments and otherwise complies with the terms of the agreement to be entered into between the City and the borrower. If the borrower fails to pay all required loan payments or otherwise fails to comply with the terms of the agreement to be entered into with the City, the City will cease paying. NO VESTED RIGHTS : The provisions of this program are intended to provide guidelines for considering applications for businesses that are seeking to participate in the Center City Special Business Loan Program. The City Council of the City of Elgin, in its sole and exclusive discretion, shall determine whether to provide any of the incentives contemplated in this program after duly considering the costs incurred by the City of Elgin for providing the incentives and after considering the relative gain derived by the public from those incentives. The City Council of the City of Elgin further expressly reserves the right and option to decide at any time whether or not to provide continued or additional funding for this program. The creation or existence of this program shall not be construed to create or provide any vested rights in any person or organization to obtain approval of a program application, a program agreement or any incentive, grant, rebates or funding thereunder. 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 . $ r 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 savings and loan official of your choice . They will process your credit application and submit a loan proposal to the City of Elgin for final approval .