HomeMy WebLinkAbout08-111 t II
Resolution No. 08-111
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 April 9,2008 for building improvements and business development in
Center City Elgin, a copy of which is attached.
s/Ed Schock
Ed Schock, Mayor
Presented: April 23, 2008
Adopted: April 23,2008
Omnibus Vote: Yeas: 7 Nays: 0
Attest:
s/Diane Robertson
Diane Robertson, City Clerk
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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. Interest on loans,
for loans up to a total maximum amount of $200, 000 per project, may
be subsidized by the City of Elgin for the first five years of the
loans .
LOAN TERMS :
Interest Rate: May not exceed 15%. Must be at or above Prime
rate of interest
Terms of Loan: Up to a 10 year amortization/conventional
commercial loans
Up to a 30-year amortization/home equity and
second mortgage loans
Collateral : First or second mortgage on property
Maximum Loan: Up to $200, 000 per building project
Purpose of Loan: Shall be used only for the acquisition or
lease of operating facilities, the purchase of
equipment or fixtures, space built out or
inventory
Conventional Commercial Loan
Monthly Payments: Interest payments by the City shall be at the
following rates payable over a period of five years :
1st 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
Home Equity and Second Mortgage
Monthly Payments: Interest payments by the City shall be at the
following rates payable over a period of five years :
ist year - 85% of first year interest costs
2nd year - 75% of second year interest costs
3rd year - 65% of third year interest costs
4th year - 55% of fourth year interest costs
5th year - 45% 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 .
ELIGIBILITY REQUIREMENTS:
To be eligible to apply for this special loan program, the applying
business must satisfyboth of the followingcriteria :
1 . Geographic : The business must be located in Center City
Elgin, in the areas outlined in the accompanying target
area map.
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 request a complete copy of the
program guidelines and a loan application form. 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 .
NO RIGHTS ESTABLISHED:
1 . The provisions of this program are intended to provide
guidelines for considering applications related to
business development entities seeking to participate in
the Center City Special Business Loan Program. The City
of Elgin, in its sole and exclusive discretion, shall
determine whether to provide any of the incentives
contemplated by 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 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 of
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.
CORRESPONDENCE:
1 . Please direct questions and comments regarding this
program to: Ray Moller, Director of Economic Development
and Business Services at 847-931-6749 or Lindsay Stanton,
Economic Development Coordinator at 847-931-5593 .
(Map remains the same)
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 . $
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 .
Revised 04-09-2008