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HomeMy WebLinkAbout91-0424 Center City Business Loan • RESOLUTION AUTHORIZING THE EXECUTION OF A SPECIAL BUSINESS LOAN PROGRAM FOR BUILDING IMPROVEMENTS IN ELGIN CENTER CITY WHEREAS, THE CITY OF ELGIN AND certain banks and savings and loan institutions have determined that it is appropriate to encourage revitalization of the Elgin Center City area; and WHEREAS the City of Elgin and certain Elgin banks and savings and loan institutions have established a special loan program for building improvement in Center City Elgin for revitalization purposes; and WHEREAS, the execution of a special business loan program for building improvements in Elgin Center City will airther such revitalization; and WHEREAS, various representatives and participants in the special loan program have identified specific geographic areas and uses of the City to be included within the special business loan program for building improvements in Elgin Center City; and WHEREAS, it is within the government affairs of the City of Elgin and in the interest of the public health, safety and welfare to promote the revitalization of the Elgin Center City area; and WHEREAS, the City of Elgin is a home rule unit within the meaning of the constitution of the State of Illinois and is authorized to exercise any power and perform any function relative to its government affairs . NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Larry L. Rice, City Manager, and Dolonna Mecum, City Clerk, are hereby authorized and directed to execute and file such instruments and documents as may be required to implement a special business loan program for building improvements in Elgin Center City, a copy of which is attached hereto and made a part hereof by reference. s/ George VanDeVoorde George VanDeVoorde, Mayor Presented: April 24 1991 Adopted: April 24 , 1991 Vote: Yeas 7 Nays 0 Recorded: Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk ■ THE ELGIN STATE BANK 500 DUNDEE AVE./ELGIN, IL 60120/PH. 708-888-7955 MARK R.ABATE President April 24, 1991 Ms. Deborah K. Nier Assistant to the City Manager City of Elgin 150 Dexter Court Elgin, Illinois 60120 RE: Elgin Center City Special Business Loan Program Dear Deborah, The Presidents of the Elgin banks and savings and loans have met to explore the concept of providing attractive financing to the owners of commercial buildings in center city Elgin for the purpose of completing interior and/or exterior building improvements. In conjunction with the city staff, we have devised a Special Business Loan Program as described in the enclosed program summary and accompanying application and proposal sheets. The bank and savings and loan Presidents have asked me to coordinate and represent the financial institutions as a group. Each of them has expressed their firm support of this new program. Based upon the meetings we have had and discussions this week with the various Presidents, I can assure you that the institutions concur with the program and recommend City Council approval . Very truly yours, MRA:bl enc. • ELGIN CENTER CITY SPECIAL BUSINESS LOAN PROGRAM FOR BUILDING IMPROVEMENTS PURPOSE STATEMENT: The City of Elgin and the Elgin banks and savings and loan institutions have established a special loan program for building improvements in center city Elgin, in an effort to stimulate expansion, reinvestment and business retention in central Elgin. 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 $50,000 per building project. Purpose of Loan: Loan proceeds must be used for building improvements (interior & exterior) Additional Interest: 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: 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, whole- saling, 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. 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 requirements of the lender. 3. Lender may require that the appraised value of the property pledged as collateral must be sufficient to secure the loan (with the loan to value ratio not to exceed 75A, 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 development plans and (3) adherence to the objectives and regulations 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. 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 scheduled loan payments. If the borrower fails to pay, the city will also cease paying. If the borrower resumes paying, then the city will resume • paying. Appendix B STANDARD INDUSTRIAL CLASSIFICATION CODE ( 1987 Manual) Major Industry Group Group Industry 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 Appendix A CENTER CITY LOAN PROGRAM Geographic Area/Location: Businesses and organizations located in the following dis- tricts may be eligible for loans provided that the proposed improvements are consistent with the Center City development goals for their respective district and the area is not tar- geted for redevelopment. 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 top. APPLICATION FOR 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: 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: Title Owner 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 . • LOAN PROPOSAL ELGIN CENTER CITY SPECIAL BUSINESS LOAN PROGRAM Company Name: Lender Name: Address: Address: Phone: Phone: Owner's Name: Account Officer Name: AMOUNT APPROVED BY LENDER: $ INTEREST RATE: TERM OF LOAN: Months Monthly Payments: $ per month by borrower $ per month initially by City Collateral : The undersigned lending institution has approved the above extension of credit. The purpose of the loan and contractor(s) are described on the attached application. Lending Institution BY: Account Officer Date: INFORMATION REQUIRED: 1. Attach copy of contractor proposals and copies of other contractor bids obtained for the proposed work. 2. Attach copy of completed Application from borrower.