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Home My WebLink About97-210 Resolution No. 97-210 RESOLUTION APPROVING LOAN UNDER THE 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 business loan program for building improvement in Center City Elgin for revitalization purposes; and, WHEREAS, Grace Richard has submitted an application to Union National Bank for loan under the special business loan program; and, WHEREAS, the Union National Bank has 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 Robert O. Malm, Interim City Manager, and Dolonna Mecum, City Clerk, are hereby authorized to approve the special business program loan as set forth in the loan approval of the Union National Bank attached hereto and made a part hereof by reference, and to make monthly interest payments in the amount of prime plus 1 (one) percent to a ceiling of fourteen ( 14) percent minus six (6) percent so long as the borrower continues to make regularly scheduled loan payments . 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 UNION NATIONAL BANK 101 EAST CHICAGO STREET• ELGIN,ILLINOIS 60120-6466• PHONE 847-888-7500■FAX 847-888-2662 1 June 5, 1997 Ms. Debra Nier City of Elgin Re: Grace Richard, 10 N.Douglas Dear Debra: As a follow up to our,conversation earlier this week, I am submitting a revised application for the Elgin Center City Special Loan Program. You will recall that City of Elgin resolution number 97-7 presented January 8, 1997 unanimously approved a loan subsidy for up to $85,000 to assist in the improvements for 10 Douglas Avenue. At that time we were only able to request$85,000 because firm bids had not been obtained for the remainder of work to be done. Our borrower now has cost estimates for the rest of the interior buildout and the exterior renovations which are attached and supported by bids and receipts. Based on these cost estimates and the substantial improvement to the value of this building, Union Bank is now prepared to finance up to $130,000 for the completion of this project, subject to approval from the City of Elgin for an increase in the subsidized loan to this$130,000 level. I'm sure that the City shares our enthusiasm for this project and our confidence that this investment will foster continued economic growth in downtown Elgin. We hope you and the City Council will take these factors into consideration as you evaluate this request. Please feel free to call me if you have any other questions. Thank you for your assistance. Sincerel R Scott Reining Executive Vice President RSR/kk Founded 1904 Union National Bank and Trust Company of Elgin Member FDIC • APPLICATION FOR ELGIN CENTER CITY SPECIAL BUSINESS LOAN PROGRAM Date: NI:Natter 19, 1996- Bldg..Purchase: $ 82,000 Improvements: 140,000 Loan Amount Requested: $130,000 Total Project Cost: Total: $222,000 Company Name: Address: 10 N. Douglas Avenue, Elgin, IL 60120 Phone: Work # (847) 741-1475 Owner's Name(s): Grace Richard Type of Business: Purpose of Loan: Renovation of entire building interior, new HVAC & A/C, convert second floor to residential. Prepare first floor for commercial tenant. BREAKDOWN OF PROJECT - AMOUNT CONTRACTOR DESCRIPTION OF WORK 1. $ SEE ATTACHED 2. $ 3. $ . 4. S ' OTHER CONTRACTOR BIDS OBTAINED DESCRIPTION OF PROPERTY: 96 yr. old commercial building with 4,064 square feet of (Size & Description) dross building area APPRAISED VALUE: "As Is": $81,500; When completed: $163,000 Loan to Value = 80% OWNER IN TITLE: Grace Richard EXISTING MORTGAGE ON PROPERTY: None 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 . • • Sheetl Grace Richard Recap of Expenditures ADJUSTED TOTAL ISND OF CONTRACT,INCL NAME AND ADDRESS W055 WRNS a CREDIT'S E.M.BOLS&SONS 5550 W.FARRAGUT CHICAGO,IL. 60630 cowpony $ 23,252.46 E.M.BOLS&SONS CONTRACT#1549R BUILD LOFT 3,325.00 E.M.BOLS&SONS STEP TREADS CONTRACT#1550R aRISERS 7,003.77 E.M.BOLS&SONS CONTRACT#1551R wsc. 18,393.00 E.M.BOLS&SONS .« . CONTRACT#1553R �BMCERAMP.° 7,045.00 Albert J.Wagner 3782 N.Clark Chicago,II. 60613 SKVUGHTS 2,990.00 SKIRMONT MECHANICAL •,/ CONTRACTORS,INC 450 HAMMOND DR ELGIN,IL.60120 PLUMING 12,894.00 SKIRMONT MECHANICAL CONTRACTORS,INC HMG 10,108.00 ACE ROOFING ROOF nix* 800.00 ACE ROOFING ROOF REPLACE 3,800.00 6n449 SHADY LANE ST.CHARLES,IL 60174 PARR ELECTRIC 425 RENNER DR. ELGIN,IL. 80123 ELECTRICAL 19,214.00 ACTIVE ELECTRIC FIXTURES 809.69 BILL&SIDS FLOORING 2,800.00 SIEGELS CABINETS 2,374.00 SIEGELS COUNTERTOPS 1,500.00 SIEGELS DAm 2,224.00 SIEGELS wNDOws 3,572.00 BRUCE DAHLQUIST ARCHTEcr 802.00 SUPERIOR SERVICES TRASH 575.00 FRWRD WATER 1,000.00 M.FLEGAL DRAFTING 350.00 PLASS APPLIANCES APrtANCEs 4,429.90 Estimate of Exterior Renovations 40,000.00 Less reimbursement from City G 35% (14.000.00) TOTAL ESTIMATED FACADE $ 26,000.00 TOTAL IMPROVEMENTS $_ 150,831.92 PURCHASE PRICE $ 82,000.00 TOTAL INVESTMENT $ 232,831.92 LOAN AMOUNT: $ 130,000.00 OWNER'S EQUITY: $ 102,831.92 Page 1 APPLICATION FOR ELGIN CENTER CITY SPECIAL BUSINESS LOAN PROGRAM Date: Nbverinr 19, 1996. Bldg. 'Purchase: $ 82,000 Improvement's: 140,000 Loan Amount Requested: $130,000 Total Project Cost: Total: $222,Oo0 Company Name: Address: 10 N. Douglas Avenue, Elgin, IL 60120 Phone: Work # (847) 741-1475 Owner's Name(s): Grace Richard Type of Business: Purpose of Loan: Renovation of entire building interior, new HVAC & A/C, convert second floor to residential. Prepare first floor for commercial tenant. BREAKDOWN OF PROJECT - AMOUNT CONTRACTOR DESCRIPTION OF WORK 1. $ SEE ATTACHED Z. $ 3. $ 4. S OTHER CONTRACTOR BIDS OBTAINED DESCRIPTION OF. PROPERTY: 96 yr. old commercial building with 4,064 square feet of (Size & Description) gross building area APPRAISED VALUE: "As Is": $81,500; When completed: $163,000 Loan to Value = 80% OWNER IN TITLE: Grace Richard EXISTING MORTGAGE ON PROPERTY: None 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 . • > • - j • • • • • • C�•t 'd Sheet1 Grace Richard Recap of Expenditures ADJUSTED TOTAL IOND OF CONTRACT,INCL MIME AND ADDRESS MINS pATRA'S&CREDITS E.M.BOLS&SONS 5550 W.FARRAGUT CHICAGO,IL. 60630 CARPENTRY $ 23,252.46 E.M.BOLS&SONS CONTRACT#1549R MILD LOFT 3,325.00 E.M.BOLS&SONS STEP TREADS CONTRACT#1550R a,RISERS 7,003.77 E.M.BOLS&SONS CONTRACT#1551R LAsc. 18,393.00 E.M.BOLS&SONS CONTRACT#1553R 7,045.00 Albert J.Wagner 3762 N.Clark Chicago,II. 60613 SKYuoHTS 2,990.00 SKIRMONT MECHANICAL CONTRACTORS,INC 450 HAMMOND DR ELGIN,IL.60120 PLUMBING 12,894.00 SKIRMONT MECHANICAL CONTRACTORS,INC HVAc 10,108.00 ACE ROOFING ROOF weir 800.00 ACE ROOFING ROOF REPLACE 3,800.00 6n449 SHADY LANE ST.CHARLES,IL 60174 PARR ELECTRIC 425 RENNER DR. ELGIN,IL. 60123 ELECTRICAL 19,214.00 ACTIVE ELECTRIC MATURES 809.69 BILL&SIDS FLOORING 2,800.00 SIEGELS cAaNETs 2,374.00 SIEGELS COUNTERTOPS 1,500.00 SIEGELS BATH 2,224.00 SIEGELS wNoows 3,572.00 BRUCE DAHLQUIST ARCHTECr 802.00 SUPERIOR SERVICES TRASH 575.00 FRWRD WATER 1,000.00 M.FLEGAL DRAFTING 350.00 PLASS APPLIANCES APPUANces 4,429.90 Estimate of Exterior Renovations 40,000.00 Less reimbursement from City a 35% (14,000.00) TOTAL ESTIMATED FACADE $ 26,000.00 TOTAL IMPROVEMENTS $ 150,831.92 PURCHASE PRICE $ 82,000.00 TOTAL INVESTMENT $ 232,831.92 LOAN AMOUNT: $ 130,000.00 OWNER'S EQUITY: $ 102,831.92 Page 1 OFE � Agenda Item No. tt 1, i City of Elgin nolo" July 17 , 1997 TO: Mayor and Members of the City Council FROM: Robert 0. Malm, Interim City Manager SUBJECT: Interest Subsidy for 10-12 Douglas Avenue and Program Amendment on Special Business Loan PURPOSE The purpose of this memorandum is to present the Mayor and members of the City Council with a request from Union National Bank to consider a revision in a previously approved interest subsidy under the Special Business Loan for Building Improve- ments Program. BACKGROUND At its December 18, 1996 Committee of the Whole meeting, the City Council approved an application for a City interest subsidy on a loan of $85,000 for 10-12 Douglas Avenue. The property is owned by Ms . Grace Richard, who is renovating both the exterior and interior of the building. Ms . Richard is also a participant in the City' s Facade Improvement Program for the exterior work (rebate estimated at $12, 898) . The property is being improved for use as a private residence ( second story) and ground-floor commercial use. The annual obligation on the existing loan subsidy is estimat- ed at $2 , 300 ( $85, 000 X 3 . 25%) , with the subsidy decreasing over time as more principal is paid off . Union Bank has approved an additional $45,000 loan to cover cost estimates for work which had not originally been bid at the time of the initial loan. The revised loan of $130, 000 will be provided at a fixed interest rate of prime + 1 ( 9 . 50%) over 120 months . The borrower will be responsible for the first 6% in interest . The City would subsidize the 3 . 5% difference ( 9 . 5% - 6% ) in interest payments over the life of the ten year loan. The City is currently providing an interest subsidy for five other projects in addition to Ms . Richard' s . Interest Subsidy/10-12 Douglas July 17 , 1997 Page 2 In order to approve the change in the loan subsidy amount, an amendment to the ordinance establishing the program is needed. Currently, the program states that financial institutions can provide a loan up to $50, 000 per project amortized over ten years . Although the loan amount is adequate for small projects , there are instances where major renovations entail substantially greater expenditures . This is the case of 10-12 Douglas, where the extent of the project--particularly im- provements pertinent to residential use--entailed expenditures in excess of $50, 000 . Several inquiries made about the program have prompted comments from both borrowers and lenders that the current maximum established amount cannot adequately cover an extensive renovation project. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED Financial institutions have expressed willingness to partici- pate in larger projects with City participation. 1 ' FINANCIAL IMPACT !J 1 . The additional City subsidy that would be required should the current loan maximum be increased is presented in attachment A. The attachment demonstrates the costs to the City at various loan amounts . 2 . 10-12 Douglas--The annual obligation on the revised loan amount is estimated to be $4 ,550 ( $130, 000 X 3 . 5% ) . The City would be responsible for subsidizing interest pay- ments over the remaining 115 months of the loan. Funds are budgeted and available in Account No. 350-0000-795 . 78-03, Commercial Rehabilitation Loan. The 1997 budget for this program is $11,000 . Future years ' budgets would need to include this interest subsidy amount. LEGAL IMPACT \040,None. ALTERNATIVES I . Program Amendment A. Approve an amendment to the Special Business Loan for Building Improvement Program providing the City with the ability to approve an interest subsidy on a loan amount greater than $50, 000 per project. B. Approve an ordinance amendment to allow financial institutions the ability to request a City interest subsidy on loan amounts in addition to that for which a subsidy had been previously approved. Interest Subsidy/10-12 Douglas July 17 , 1997 Page 3 C . Do not approve amendments to the Special Business Loan Program for Building Improvements . II . Interest Subsidy for 10-12 Douglas A. Approve the interest subsidy based on an additional loan amount of $45 , 000 for a total loan of $130 , 000 . B. Do not approve an interest subsidy on the increased loan amount. RECOMMENDATION It is recommended that City Council request staff to prepare an ordinance amendment to ( 1 ) provide for the ability to approve interest subsidy on loans greater that $50 , 000 per project and ( 2 ) provide for the ability to approve interest subsidy on additional loan amounts for a previously approved project. It is further recommenoud City approving participate the request improvements to 10-12 Douglas Avenue by for the interest subsidy on the increased loan amount. Respectfully submitted, kb4A-0-4 WILitA6D Deborah K. Nier, Director Ne e ur Partnership Robe t 0. Malm Interim City Manager dkn/dkm CITY OF ELGIN SPECIAL BUSINESS LOAN INTEREST SUBSIDY PROGRAM LOAN INTEREST RATE AMOUNT 8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 11.0%. 12.0% $50,000 $6,184 $7,779 $9,393 $11,026 $12,678 $14,349 $16,038 $19,470 $75,000 $9,276 $11,669 $14,090 $16,539 $19,017 $21,523 $24,057 $29,205 $100,000 $12,369 $15,558 $18,786 $22,052 $25,356 $28,697 $32,075 $38,941 $125,000 $15,461 $19,448 $23,483 $27,566 $31,695 $35,872 $40,094 $48,676 $150,000 $18,553 $23,337 $26,179 $33,079 $38,034 $43,046 $48,113 $58,411