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HomeMy WebLinkAbout97-209 Resolution No. 97-209 RESOLUTION AUTHORIZING AN AMENDED 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 established a special loan program for building improvements in Center City Elgin for revitalization purposes; and WHEREAS, it is in the best interest of the City of Elgin to amend the Special Business Loan Program by increasing the maximum loan amount and offering supplemental loan amounts . NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Robert O. Malm, Interim 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 the amended 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/ Kevin Kelly Kevin Kelly, Mayor Presented: August 13, 1997 Adopted: August 13, 1997 Omnibus Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk 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: 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 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 (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 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. 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 top. PROGTARG.ET/TEXT081/NEWCENTU.RY 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 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 . $ BUSLOANA.PPL/TEXT081/NEWCENTU.RY 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 applica- tion and submit a loan proposal to the City of Elgin for final approval .