HomeMy WebLinkAbout08-148 Resolution No. 08-148
RESOLUTION
APPROVING LOAN UNDER THE SPECIAL BUSINESS LOAN PROGRAM
FOR BUILDING IMPROVEMENTS IN ELGIN CENTER CITY
(Elgin Public House-219 E. Chicago Street)
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,Greg Shannon,Inc.;Greg Shannon;Anthony Shannon;Cecilia Whitt and Lou
Gramm(Elgin Public House),have submitted applications to Citibank,Old Second National Bank
and Country Wide for a loan under the special business loan program; and
WHEREAS,Citibank,Old Second National Bank and Country Wide have 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 Olufemi Folarin,City Manager,and Diane Robertson,City Clerk,are hereby
authorized to approve the special business loan agreement as set forth in the loan approvals of
Citibank, Old Second National Bank,and Country Wide attached hereto and made a part hereof by
reference,and to make monthly interest payments in the amount indicated on the Center City special
business loan agreement between Greg Shannon, Inc.; Greg Shannon; Anthony Shannon; Cecilia
Whitt; and Lou Gramm (Elgin Public House)and the City.
s/Ed Schock
Ed Schock, Mayor
Presented: June 11, 2008
1 1
Adopted: June 11, 2008
Omnibus Vote: Yeas: 6 Nays: 0
Attest:
s/Diane Robertson
Diane Robertson, City Clerk
r
CITY OF ELGIN CENTER CITY SPECIAL
BUSINESS LOAN AGREEMENT
THIS AGREEMENT is hereby made and entered into
this 16 day of�Vq"\Q, 2008, by and between the City of
Elgin, Illinois, a municipal corporation (hereinafter
referred to as the "City" ) , and the Elgin Public House Greg
Shannon Inc . , an Illinois Corporation; Greg Shannon,
Anthony Shannon, Cecilia Whitt, and Lou Gramm.
(hereinafter referred to as the "Tenants" ) .
WHEREAS, the City has established a City of Elgin
Center City Special Business Loan Program 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 as Exhibit A (hereinafter referred to as the
"Program" ) ; and
WHEREAS, the Program contemplates the City paying a
portion of financing costs for eligible building
improvements; and
WHEREAS, Tenants are the tenants in the property
commonly known as 219 E . Chicago Street, Elgin, Illinois,
(hereinafter referred to as the "Subject Property" ) which
is located in the Center City area as described in Program
hereto; and
I
WHEREAS, Tenants have applied for and obtained
approval for a loan agreement to finance the cost of the
proposed building improvements on the Subject Property, a
copy of such loan agreements being attached hereto and made
a part hereof as Exhibit C (hereinafter referred to as the
"Subject Loan Agreements") .WHEREAS, Tenants have completed
an application for participation in the subject Program
which identifies the proposed improvements to the Subject
Property, a copy of Tenant ' s application for participation
in the Subject Program being attached hereto and made a
part hereof as Exhibit B.
NOW, THEREFORE, for and in consideration of the mutual
promises, covenants and undertakings contained herein, and
other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows :
1 . That the foregoing recitals are hereby
incorporated into this agreement in their entirety.
2 . That Tenants application for participation in the
Program is hereby approved.
3 . That as long as the Tenants continue to make
regularly scheduled loan payments on the Subject Loan
Agreement and otherwise comply with the terms of this
agreement City shall pay an interest subsidy on the Subject
Loan Agreements consisting of monthly reimbursement
payments to Tenants in the amount equal to 85% of the first
year ' s interest, 75% of the second year ' s interest, 65% of
the third year ' s interest, 55% of the fourth years
interest, and 45% of the fifth and final year ' s interest,
commencing as of January 1 2008, upon receipt of
verification of payment from lender and pursuant to the
amortization and payment schedules attached hereto and made
a part hereof as Exhibit D.
4 . In no event shall the interest rate exceed
fifteen (15%) percent . In no event shall the total loan
amount exceed $200 , 000 . In no event shall the interest
payments exceed $32 , 739 . The Tenant shall make all other
principal and interest payments and all other payments on
the Subject Loan Agreements . It is expressly agreed and
understood that the City is not and shall not be deemed to
be a party to the Subject Loan Agreements or an obligor or
oblige thereunder. This agreement in general , and the
City' s agreement to make interest payments hereunder in
particular, shall not be construed, and shall not be relied
upon by any party, including, but not limited to, the
lender in the subject loan agreement or any successor or
assign thereof, to require the repayment of any principal
loan amounts, the execution of any mortgage loan documents,
or to otherwise act as a guarantor on any loan agreements
under any circumstances . Additionally, the provisions of
this agreement shall not be construed so as to create any
obligations as to City based on any theory of equitable or
promissory estoppel .
5 . In the event the Tenants convey any of its
interest in Subject Property prior to January, 2013 , Tenant
shall refund all payments made by city pursuant to this
agreement no later than 30 days after such conveyance .
6 . 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 Tenants ongoing compliance
with all terms and requirements of the program and this
agreement .
7 . That upon completion of the improvements, and for
a period of five (5) years thereafter, Tenants shall
properly maintain the improvements in their finished form,
without alteration or change thereto .
8 . That nothing herein is intended to limit,
restrict or prohibit the Tenants from undertaking other
work in or about the Subject Property which is unrelated to
the improvements provided for in this agreement .
9 . That this agreement may not be assigned without
the prior written consent of the City.
10 . Tenants hereby agrees to hold harmless, defend
and indemnify the City from and against any and all causes
of action, 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 which may arise out of or in connection with
Tenants or Tenants ' agents, employees' , contractors' and
assigns' negligent performance of any of the terms of this
agreement . In the event the provisions of this paragraph
are invoked, counsel for City shall be of City' s choosing.
The terms and provisions of this paragraph shall survive
any termination and/or expiration of this agreement .
11 . That this agreement shall not be construed to
create a partnership, joint venture or employment
relationship between the parties hereto.
12 . Tenants 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 .
13 . That this agreement shall be subject to and
governed by the laws of the State of Illinois . Venue for
the resolution of any disputes or the enforcement of any
rights arising out of or in connection with this agreement
shall be in the Circuit Court of Kane County, Illinois .
14 . 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 .
15 . 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 : Elgin Public House
219 E . Chicago Ave .
Elgin, Il 60120
16 . This agreement constitutes the only agreement
between the parties hereto. There are no other agreements,
either oral or implied, in existence between the parties
hereto. The terms and provisions of this agreement shall
not be amended unless such amendments are in writing and,
are properly executed by the parties hereto.
17 . In the event of Tenants breach of any of the
terms of this agreement, Tenants shall refund to City the
full amount of any payments made by City to Tenants or to
any other entity on Tenants behalf, including but not
limited to, any lender, upon thirty (30) days written
demand. City shall thereafter be entitled to any and all
other rights and remedies as may be available to it by law.
All parties in this Agreement, including Greg Shannon Inc .
Greg Shannon; Anthony Shannon; Cecilia Whitt; and Lou
Gramm, shall be jointly and severally liable to the City
pursuant to this Agreement .
18 . This agreement shall terminate on January, 2013 .
City may terminate this agreement for any or no reason upon
•
fourteen (14) days written notice. In the event City
terminates this agreement, City shall be under no further
obligations pursuant to this agreement, and Tenant shall be
entitle to no further relief pursuant to this agreement .
IN WITNESS WHEREOF, the parties hereto have entered
into and executed this agreement the day and year first
written above.
CITY OF ELGIN Elgin Public House
By:
BY: --011F0t
• u =i -o a ~ri Greg S non, Inc . an
City Mat.ger Illin is Corporation
.?pfp5tWitir
Greg S on
An ony S ,annon
Celcilla Whitt
Lou rammm
) --"Zi(ZeN'
Attest :
City Clerk
t
$HATED EFQ'
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 :
1st 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 satisfy both of the following criteria:
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 : $ 120; ,°''Total Project Cost : $
Company Name : jl,c �td '.—
4Lj,,, t( 2-0
Address : '�i� L - �'�` c'```]�
Phone : 7... gcs-(t0
Owner' s Name (s) : - 4,4 A) Nei
Type of Business : R...117,37-4-..4-4Wi
of Loan: 574-{� -
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 .
Revised 04-09-2008
am
3W A y� ''
s� ':
April 4, 2008 i. ,,3 i NORTHWEST
TO: Mayor and Members of the City Council (,;�t,� � . 1 ,,
i'ft 7C+ Yin `�t
FROM: Olufemi Folarin, City Manager i6/,,,n;, c,nu�rf,ar,A
Raymond H. Moller, Director of Economic Development Ijtt,,r,d�,i rat tea,,
&Business Services
SUBJECT: Application for Participation in the Center City Business Loan Program for Elgin
Public House
PURPOSE
The purpose of this memorandum is to provide the Mayor and members of the City Council with
information to consider subsidizing interest on loans for equipment, fixtures, and build out costs
made by Greg Shannon, Anthony Shannon, Cecilia Whitt and Lou Gramm, located at 219 E.
Chicago Street,through home equity loans from Citibank and Old Second Bank.
RECOMMENDATION
It is recommended that the City Council approve participation in the Special Business Loan
Program by Greg Shannon, Anthony Shannon, Cecilia Whitt and Lou Geham in the amount of
$20,142 and$12,597.
BACKGROUND
As a partner with lending institutions in the Center City Business Loan Program, the City of
Elgin has subsidized interest on loans made to Center City area businesses. At present, the City
has been involved in 14 such loans made for projects undertaken by Center City businesses.
In order to participate in the program, the applicant is required to seek financing through and
receive approval from a lending institution and file an application for the interest subsidy with
the City. If approved, the City agrees to pay an interest subsidy on the loan agreement to the
lender on a monthly basis. The terms of the current Center City Business Loan Program are as
follows:
1. Borrowers' interest rates on their loans 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 10 year amortization.
4. The interest rate for the loan must be at or above the prime rate of interest.
Center City Business Loan Program
April 4, 2008
Page 2
5. The loan proceeds shall be used only for the acquisition or lease of operating,
facilities,the purchase of equipment or fixtures, space build-out,or inventory.
6. Interest payments by the City shall be at the following rates payable over a period of
five years:
1st year—90% of the first year interest costs
2nd year—89%of the second year interest costs
3rd year—70%of the third year interest costs
4th year—60%of the fourth year interest costs
5th year—50%of the fifth year interest costs
As the City has attempted to work with potential businesses that are considering locating in the
Center City, some prospective businesses have chosen not to or have been unable to secure
conventional bank financing.
In order for such businesses to be eligible for City assistance, staff is suggesting that personal
home equity loans and lines of credit on residential property be considered as eligible financing
tools for prospective Center City businesses.
1. Borrower's 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 not exceed 30 years.
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 build-out, or inventory.
6. Interest payments by the City shall be at the following rates payable over a period of
five years:
1st year— 85%of the first year interest costs
2nd year— 75% of the second year interest costs
3rd year— 65%of the third year interest costs
4th year— 55%of the fourth year interest costs
5th year—45%of the fifth year interest costs
The level of participation proposed by the City is reduced by 5% each of the five years because
the level of scrutiny required of applicants' personal finances will not occur if the financing is
through a non-conventional bank loan process. In addition, a more prolonged period of
repayment may be required due to the nature of the business that is being financed.
,
•
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Center City Business Loan Program
April 4, 2008
Page 3
The Elgin Public House has been operating at 219 East Chicago Street since January of 2007.
The restaurant has proven to be a very positive attraction for the downtown and has become a
gathering spot for Elgin residents from throughout the City.
Proceeds from the two loans have been used to buy the business, construct the build out and to
outfit the restaurant.
Loan#1
Amount: $63,991
Interest Rate: 9.88%
Term: 25 years
Annual Interest City%of City's
Year Payment Interest Payment Payment
1 $6,319 85% $5,371
2 6,254 75% 4,690
3 6,182 65% 4,018
4 6,103 55% 3,356
5 6,016 45% 2,707
$20,142
Loan#2
Amount: $56,259
Interest Rate: 7.2%
Terms: 20 years
Annual Interest City%of City's
Year Payment Interest Payment Payment
1 $4,051 85% $3,443
2 3,954 75% 2,965
3 3,850 65% 2,503
4 3,739 55% 2,057
5 3,620 45% 1,629
$12,597
The interest subsidy payable by the City for the five year period for both loans is$32,739.
It should be noted that the City will make the monthly interest payments as long as the borrower
continues to make timely,regularly scheduled loan payments and otherwise complies with the
1 •
Center City Business Loan Program
April 4, 2008
Page 4
terms of the agreement to be entered into between the City and the borrower. If the borrower
fails to pay all required loan payments, both principal and interest, or otherwise fails to comply
with the terms of the proposed agreement, the City will cease payment.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None
• FINANCIAL IMPACT
There are sufficient funds available in the Riverboat Fund, account number 275-0000-791.80-27,
Economic Development Incentives, to enter into this $32,739 agreement with Elgin Public
House Ownership in project number 177002. In 2008, $4,018,090 was budgeted for this account
with $3,969,803 expended or encumbered to date. Following approval of this expenditure,
$15,548 remains available.
LEGAL IMPACT
None
ALTERNATIVES
1. The City Council may choose to approve the application by Elgin Public House to
participate in the Special Business Loan Program for building improvements in the
amount of$32,739.
2. The City Council may choose to deny the application for participation in the Special
Business Loan Program for building improvements and equipment by Elgin Public
House.
Respectfully submitted for Council consideration.
Attachment
a , ,*
THIS NOTE IS SECURED BY A JUNIOR MORTGAGE
Home Equity Line of Credit Agreement
MIN Number 100104500000113375
Borrower's'name
LOU E GRAM
Lender's name Date Account Number
OLD SECOND NATIONAL BANK FEBRUARY 12,2007 30220/002004149921
Initial ANNUAL PERCENTAGE RATE Initial Daily Periodic Rate
'9.4500% 0.02589%
Initial Index Margin
8.2500% 1.2000%
Credit Limit(US Dollars) Initial Advance(US Dollars)
$61,200.00 $48,000.00
Property Address(Subject to Security Instrument) Length of Draw Period Length of Repayment Period
67 GARFIELD ST,OSWEGO,ILLINOIS 60543 120 Months 240 Months
•
In this agreement, I, ME and MY refer to each borrbwer and co-borrower who signs this agreement. YOU and YOUR refer to the
Lender named above,and any assignee. This agreement covers my Home Equity Line of Credit with you,which is a revolving line of
credit.
I understand that the date shown above is the'date this agreement is prepared by you. This agreement is effective and is considered
made when you approve my credit and accept it after I have properly signed it,subject to any right of rescission under applicable law.
Home Equity Line of Credit Loans • -•
• - I may obtain a loan from this line of credit by using any special draft you have given me. I may not use any special drafts provided by
•you to pay amounts I owe under'this Home Equity Line of Credit. I may request advances for a period of 120 months after my
account is opened (the "Draw Period"). After the Draw Period, I may not receive any additional advances and must repay all
outstanding amounts over the next 240 months(the"Repayment Period").
Credit Limit
My Home Equity Line of Credit is a revolving line of credit.
My credit limit is disclosed above.You do not have to give me any loan that would bring my unpaid balance over that limit. If you do
make such a loan,any unpaid loan balance in excess of my credit limit("Overlimit Amount")will be due with my next payment.
Promise to Pay •
I promise to repay all sums owed under this Home,gquity Line of Credit to you or to your order in U.S. Dollars. This includes any
loans, finance charges and all other amounts due under this agreement and the Mortgage/Deed of Trust/Trust Deed that secures my
line of credit(the"Security Instrument")in accordance with their terms. I must pay at least the minimum payment(described below)
by the due date shown on each monthly statement. In any event,I promise to pay to you or to your order all amounts I owe under this
Home Equity Line of Credit no later than the Maturity Date(defined below)or any sooner termination of this agreement.
If this line of credit is a joint account, I acknowledge that each borrower and co-borrower who signs this agreement is jointly and
severally liable for the full unpaid loan balance,all finance charges and all other charges outstanding under this agreement.
Maturity Date
This agreement will mature on MARCH 06,2037 ("Maturity Date"). Until the Maturity Date,you agree to make the loans described
above, subject to the terms of this agreement. I understand and agree that my unpaid loan balance,together with any unpaid finance
charges and any other charges authorized under this agreement, are payable to you in full on the Maturity Date, unless you agree to
renew this agreement or to refmance my loan balance, subject to my credit qualifications at the Maturity Date.
HC#38502 (January 18,2006) 1 (;
Illinois-Junior Lien HELOC Agreement 10/20 Draw/Repay. Guardian,...,
®2006 Guardian Mortgage Documents,Inc.-CITGMDF Disb 02-16-07
iv
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OMB Approval No.2502-0265
A. Settlement Statement B. Type of Loan
1-5. Loan Type Cony.Unins.
First American Title Insurance Company 6. File Number 1502103
Settlement Statement
7. Loan Number 143771700
8, Mortgage Insurance Case Number
NIA
C. Note: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown,items marked"(POC)"were paid outside this closing; they are shov
here for informational purposes and are not included in the totals.
D. Name of Borrower: Cecilia Whitt;Gregory Shannon;Anthony Shannon
1010 Washington,Lombard,IL 60148
E. Name of Seller: Second Mortgage
F. Name of Lender: Countrywide Bank,N.A.
2206 Eastland Drive,Suite 105
Bloomington,IL 61704
G. Property Location: 1010 Washington,Lombard,IL 60148
H. Settlement Agent:First American Title Insurance Company
Address:27775 Diehl Road,Suite 200,Warrenville,IL 60555 Settlement Date: 1012412006
Place of Settlement Address:27775 Diehl Road,Suite 200,Warrenville,IL 60555 Print Date: 1012412006,1:17 PM
Disbursement Date: 1012412006
J. Summary of Borrower's Transaction K. Summary of Seller's Transaction
100. Gross Amount Due From Borrower 400. Gross Amount Due To Seller
101. Contract Sales Price 401. Contract Sales Price
102. Personal Property 402. Personal Property
103. Settlement charges to borrower(line 1400) 511.00 403, Total Deposits
104. Undisbursed Funds-Countrywide Bank,N.A. 4,528.00 404.
105. 405.
Adjustments for items paid by seller in advance Adjustments for items paid by seller in advance
106. City/town taxes 406. City/town taxes
107. County taxes 407. County taxes
108. Assessments 408. Assessments
109. 409,
110. 410.
111. 411,
112. 412.
113. 413.
114. 414.
115. 415.
120.Gross Amount Due From Borrower 5,039.00 420, Gross Amount Due To Seller
200. Amounts Paid By Or In Behalf of Borrower 500. Reductions In Amount Due to Seller
201. Deposit or earnest money 501. Excess deposit(see instructions)
202. Principal amount of new loan(s) 64,528.00 502. Settlement charges(line 1400)
203, Existing loan(s)taken subject 503. Existing loan(s)taken subject
204. 504. Payoff of first mortgage loan
205. 505. Payoff of second mortgage loan
206. 506.
207. 507.
208. 508.
209. 509.
Adjustments for items unpaid by seller Adjustments for items unpaid by seller
210. City/town taxes 510. City/town taxes
211. County taxes 511, County taxes
• Property Location: 1010 Washington,Lombard,IL 60148
• Settlement Agent:First American Title Insurance Company
Address:27775 Diehl Road,Suite 200,Warrenville,IL 60555 Settlement Date: 10/24/2006
lace of Settlement Address:27775 Diehl Road,Suite 200,Warrenville,IL 60555 Print Date: 10/24/2006,1:17 PM
Disbursement Date: 10/24/2006
Summary of Borrower's Transaction K. Summary of Seller's Transaction
)0. Gross Amount Due From Borrower 400. Gross Amount Due To Seller
)1. Contract Sales Price 401. Contract Sales Price
)2. Personal Property 402. Personal Property
)3. Settlement charges to borrower(line 1400) 511.00 403. Total Deposits
)4. Undisbursed Funds-Countrywide Bank,N.A. 4,528.00 404.
)5. 405.
djustments for items paid by seller in advance Adjustments for items paid by seller in advance
)6. City/town taxes 406. City/town taxes
)7. County taxes 407. County taxes
)8. Assessments 408. Assessments
19. 409.
0. 410.
1. 411.
2. 412.
3. 413.
4. 414.
5, 415.
!0.Gross Amount Due From Borrower 5,039.00 420. Gross Amount Due To Seller
10. Amounts Paid By Or In Behalf of Borrower 500, Reductions In Amount Due to Seller
i1. Deposit or earnest money 501. Excess deposit(see instructions)
)2. Principal amount of new loan(s) 64,528.00 502. Settlement charges(line 1400)
13. Existing loan(s)taken subject 503. Existing loan(s)taken subject
4. 504. Payoff of first mortgage loan
'5. 505. Payoff of second mortgage loan
6. 506.
7. 507.
8. 508.
9. 509.
ijustments for items unpaid by seller Adjustments for items unpaid by seller
0. City/town taxes 510. City/town taxes
1. County taxes 511. County taxes
2. Assessments 512. Assessments
3. 513
4. 514.
5. 515.
6. 516.
7. 517.
8. 518.
9. 519.
0, Total Paid By/For Borrower 64,528.00 520. Total Reduction Amount Due Seller
0. Cash At Settlement From/To Borrower 600. Cash At Settlement To/From Seller
1. Gross amount due from Borrower(line 120) 5,039.00 601. Gross amount due to Seller(line 420)
2. Less amounts paid bylfor Borrower(line 220) 64,528.00 602. Less reductions in amounts due to Seller(line 520)
3. Cash( From)(X To)Borrower 59,489.00 603.
1e HUD-1 Settlement Statement which I have prepared is a true and accurate account of this transaction. I have caused or will cause the funds to be
;bursed in accordance with this statement. '4.(�
?ttlement Agent: Date:I l� `f°
.i., ,,,i.,,,;t,,e - --A
April 4, 2008IFNORTHWEST
TO: Mayor and Members of the City Council
FROM: Olufemi Folarin, City Manager
0 r t.you a, nrl
Raymond H. Moller, Director of Economic Development n y,„tied lax B;1 e
&Business Services
SUBJECT: Application for Participation in the Center City Business Loan Program for Elgin
Public House
PURPOSE
The purpose of this memorandum is to provide the Mayor and members of the City Council with
information to consider subsidizing interest on loans for equipment, fixtures, and build out costs
made by Greg Shannon, Anthony Shannon, Cecilia Whitt and Lou Geham, located at 219 E.
Chicago Street, through home equity loans from Citibank and Old Second Bank.
RECOMMENDATION
It is recommended that the City Council approve participation in the Special Business Loan
Program by Greg Shannon, Anthony Shannon, Cecilia Whitt and Lou Geham in the amount of
$20,142 and $12,597.
BACKGROUND
As a partner with lending institutions in the Center City Business Loan Program, the City of
Elgin has subsidized interest on loans made to Center City area businesses. At present, the City
has been involved in 14 such loans made for projects undertaken by Center City businesses.
In order to participate in the program, the applicant is required to seek financing through and
receive approval from a lending institution and file an application for the interest subsidy with
the City. If approved, the City agrees to pay an interest subsidy on the loan agreement to the
lender on a monthly basis. The terms of the current Center City Business Loan Program are as
follows:
1. Borrowers' interest rates on their loans 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 10 year amortization.
4. The interest rate for the loan must be at or above the prime rate of interest.
Center City Business Loan Program
April 4, 2008
Page 2
5. The loan proceeds shall be used only for the acquisition or lease of operating
facilities, the purchase of equipment or fixtures, space build-out, or inventory.
6. Interest payments by the City shall be at the following rates payable over a period of
five years:
1st year—90%of the first year interest costs
2nd year—89% of the second year interest costs
3rd year—70% of the third year interest costs
4th year—60% of the fourth year interest costs
5th year—50%of the fifth year interest costs
As the City has attempted to work with potential businesses that are considering locating in the
Center City, some prospective businesses have chosen not to or have been unable to secure
conventional bank financing.
In order for such businesses to be eligible for City assistance, staff is suggesting that personal
home equity loans and lines of credit on residential property be considered as eligible financing
tools for prospective Center City businesses.
1. Borrower's 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 not exceed 30 years.
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 build-out, or inventory.
6. Interest payments by the City shall be at the following rates payable over a period of
five years:
1st year—85% of the first year interest costs
2nd year—75% of the second year interest costs
3rd year—65%of the third year interest costs
4th year—55% of the fourth year interest costs
5th year—45%of the fifth year interest costs
The level of participation proposed by the City is reduced by 5% each of the five years because
the level of scrutiny required of applicants' personal finances will not occur if the financing is
through a non-conventional bank loan process. In addition, a more prolonged period of
repayment may be required due to the nature of the business that is being financed.
•
•
Center City Business Loan Program
April 4, 2008
Page 3
The Elgin Public House has been operating at 219 East Chicago Street since January of 2007.
The restaurant has proven to be a very positive attraction for the downtown and has become a
gathering spot for Elgin residents from throughout the City.
Proceeds from the two loans have been used to buy the business, construct the build out and to
outfit the restaurant.
Loan#1
Amount: $63,991
Interest Rate: 9.88%
Term: 25 years
Annual Interest City% of City's
Year Payment Interest Payment Payment
1 $6,319 85% $5,371
2 6,254 75% 4,690
3 6,182 65% 4,018
4 6,103 55% 3,356
5 6,016 45% 2,707
$20,142
Loan#2
Amount: $56,259
Interest Rate: 7.2%
Terms: 20 years
Annual Interest City%of City's
Year Payment Interest Payment Payment
1 $4,051 85% $3,443
2 3,954 75% 2,965
3 3,850 65% 2,503
4 3,739 55% 2,057
5 3,620 45% 1,629
$12,597
The interest subsidy payable by the City for the five year period for both loans is $32,739.
It should be noted that the City will make the monthly interest payments as long as the borrower
continues to make timely, regularly scheduled loan payments and otherwise complies with the
Center City Business Loan Program
April 4, 2008
Page 4
terms of the agreement to be entered into between the City and the borrower. If the borrower
fails to pay all required loan payments, both principal and interest, or otherwise fails to comply
with the terms of the proposed agreement, the City will cease payment.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None
FINANCIAL IMPACT
There are sufficient funds available in the Riverboat Fund, account number 275-0000-791.80-27,
Economic Development Incentives, to enter into this $32,739 agreement with Elgin Public
House Ownership in project number 177002. In 2008, $4,018,090 was budgeted for this account
with $3,969,803 expended or encumbered to date. Following approval of this expenditure,
$15,548 remains available.
LEGAL IMPACT
None
ALTERNATIVES
1. The City Council may choose to approve the application by Elgin Public House to
participate in the Special Business Loan Program for building improvements in the
amount of$32,739.
2. The City Council may choose to deny the application for participation in the Special
Business Loan Program for building improvements and equipment by Elgin Public
House.
Respectfully submitted for Council consideration.
Attachment