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HomeMy WebLinkAbout98-267 Resolution No. 98-267 RESOLUTION APPROVING LOAN UNDER THE SPECIAL BUSINESS LOAN PROGRAM FOR BUILDING IMPROVEMENTS IN ELGIN CENTER CITY ( 17-25 North Grove Avenue) 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, J.R. Properties, Ltd. has submitted an application to The First National Bank of Chicago for loan under the special business loan program; and, WHEREAS, The First National Bank of Chicago 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 Joyce A. Parker, 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 First National Bank of Chicago 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: October 28, 1998 Adopted: October 28, 1998 Omnibus Vote: Yeas 6 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk SENT BY:Xerox Telecopier 7021 ; 10-19-98 ; 7:12AM ; 8476222288-• 18479315610;# 2 FIRST CHICAGO Andrew Q.Stollluas The First National Bank of Chicago Asslatant Vice President Commercial Ranking 24 East Chicago Street,3rd Floor Elgin,Illinois 80120 Tel: (847)822.2283 FAX:(847)697-4955 4 June 11, 1998 Mr. Jerry Goldstein J.R. Properties, Ltd. 107 E. Highland Ave. Elgin, IL 60120 Dear Jerry: I am pleased to inform you that The First National Bank of Chicago has approved your request for a loan under the Elgin Center City Special Business Loan Program for Building Improvements. The amount of the loan will be $67,899.34 and will be according to the terms of the program. The terms are as follows: Interest Rate: 8.6% (6.0% paid by borrower) Maturity: November 27, 2000 Collateral: Mortgage on property located at 17-25 Grove Ave., Elgin, IL. 7 If you should have any questions concerning the above information, please do not hesitate to call me at (847) 622-2283. Sincerely, 144.141,0 Andrew G. Stollfuss Assistant Vice President • 'i 0 ORIGINAL PRINTED ON RECYCLED PAPER 4,OFE� ( � Agenda Item No. -�� f A City of Elgin r'-- �u. October 6, 1998 TO: Mayor and Members of the City Council FROM: Joyce A. Parker, City Manager SUBJECT: Center City Special Business Loan Program PURPOSE The purpose of this memorandum is to present to the Mayor and City Council members a request from Jerry Goldstein and Rose Goldstein to expand their participation in the Center City Special Business Loan Program. BACKGROUND In September, 1991, the City Council approved the participa- tion of JR Properties ( Jerry and Rose Goldstein) in the Center City Special Business Loan Program. The original loan from Larkin Bank was for $46 , 300 . The proceeds of the loan funded improvements to 107 East Highland Avenue . JR Properties also owns property located at 17 North Grove Avenue . In June, 1998, the Goldsteins secured an increase of $50, 000 to their original loan in order to fund interior and exterior improvements to 17 North Grove Avenue . The scope of work at the site is as follows : general con- struction and carpentry, dry wall, plumbing, electrical, painting, storm doors and windows and awnings . The interest rate on the current loan is 8 . 6% . The Center City Special Business Loan Program provides that the City would fund the difference between 8 . 6% and 6% for 29 months . The specifications for the program appear to contemplate applications to the City for participation in the program simultaneously with application to a bank for approval of the underlying loan. However, nothing within the loan program guidelines appears to prohibit approval of participation in the Special Business Loan Program for a loan approved by a bank prior to application to the City. The City' s guidelines include a provision for supplemental loan amounts somewhat similar to the circumstance in this case . Thus, an existing loan could be increased, as is the case with the JR Properties request . Center City Special Business Loan Program . October 6, 1998 Page 2 COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None . FINANCIAL IMPACT The loan interest subsidy being requested is $3 , 822 .42 , per the attached schedule . Sufficient funding is available in Fund 350-0000-795 . 78-03 for this project . 011/ LEGAL IMPACT None . ALTERNATIVES 1) Approve participation in the Center City Special Business Loan Program by JR Properties . 2) Deny participation in the loan program. RECOMMENDATION It is recommended that participation in the Center City Special Business Loan Program be approved for JR Properties . Respectfully submitted, ce A. Parker City Manager amp Attachment Wece(0c _ 11. APPLICATION FOR CITY OF ELGIN CENTER CITY SPECIAL BUSINESS LOAN PROGRAM Date : J 8' Loan Amount Requested: $ S(9, o mU Total Project Cost: $ rF so 13 6 Company Name : JJ& ?GZ T ESI L'I) Address : ( 0 1 E_ t Ft- LL4-t-I1 ( YE. Phone: y - c© Owner ' s Name( s ) : )e RR-y T�cc' sco L,DSiei>J Type of Business : Purpose of Loan: KeN►J o c rl-i o ►J Does this loan represent an addition to a loan previously approved for this project? YES X NO 13 c r- L1-1 CorcP 2a- D .this DLQL EXiST�1��i If yes , please indicate original amount, date approved and total loan amount with proposed increment. Original loan approved: $ y6 3 © d Date Approved: lD/[/Q/ Total loan with proposed increment: $ 49 6 3 O U BREAKDOWN OF PROJECT AMOUNT CONTRACTOR DESCRIPTION OF WORK 1 . $ )- eS1.36 r e Sir L- Co f-r7. 6.9-RP 'c•i 2 . $ 17/6,?0, °a Vzy 3 . • $ 30F.2, IfRz-?o , �i" PLv mg 4 . $ 5' -/O' a' ' Lfv-714Rop L �,�crz c- 5 G S 0` Do 'Q A i tJ r3 ow per; t--T c 2.5 Pf4-i 1 J 7 i 0 6 C a Z.13 1)L),S1-2ie5 STo2 Doo2syw i r�1")°c-r-9-r 3USLOANA.PPL/TEXT081/N£WCENTU. RY • / p 0° GTr Z I�vJ �.f i r��� A w tJ i 0 ‘S 63 6' 00 C. f. --7 of / 3O2, 6 / +ietzzy 1 , 4'01_.b rw-is,J % s OTHER CONTRACTOR BIDS OBTAINED DESCRIPTION OF PROPERTY: S - (}TTR- I-1 L D (Size & Description) APPRAISED VALUE : °4J5 DD6 OWNER IN TITLE : < '• �. ? )-LoP�ZT-i C S, STD EXISTING MORTGAGE ON PROPERTY: Y4-moo 5'/ 401 ?-00 OTHER INFORMATION REQUIRED_INITIALLY: Fi iEN �- P,k-ae-IDS' 0 ► ' Lr A--r- F1 r G h C cr}t o a 4- yc J 1 . Business Year end Financial Statementslast two years . v04 y 7-I4E11-I }� S 2 . Business Interim Financial Statement - current year-to-date . N 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 p O p ES L pplicant B siness 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 . 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%) Ai; 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 . 111 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 a P Ying. BUSLOANP.ROG/TEXT081/NEWCENTU.RY 04,/2/ 11' • 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 ) ,or Industry )uo Group Industry 523 Paint, glass and wallpaper stores 525 Hardware stores ,3 General merchandise stores 544 Candy, nuts , confectionary 545 Dairy products 546 Retail bakeries 549 Except for poultry dealers 6 Apparel and accessory stores 7 Home furniture, furnishings and equipment stores 8 Eating and drinking places 591 Drug stores and proprietary stores 593 Antique st-ores only 594 Miscellaneous shopping goods stores 599 Retail stores, not elsewhere classified 0 • Depository Institutions 1 Non-depository credit institutions 2 Security and commodity brokers, dealers, exchanges and services 3 Insurance carriers 4 Insurance agents, brokers and service 5 Real estate 7 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. 3 Business services 753 Automotive repair shops B Motion pictures • 9 Amusement and recreational services 0 Health services, except for industry group 809 1 Legal Services 824 Vocational schools 829 Schools and educational services, not elsewhere classified 841 Museums and art galleries 6 Membership organizations 7 Engineering, accounting, research, management and related services . SENT BY:Xerox Telecopier 7021 ;10- 9-98 ; 8:38AM 84762222884 16479315610;# 2 Sheetl J, R. Properties $ 87,899.34 Date Principal Int. at 2.8% 7/27/1998 67,333.51 $ 198,15 8/27/1998 66,787.88 $ 145.89 9/27/1998 68,201.85 $ 144.68- 10/27/1998 85,836.02 $ 148.22 1 1/27/1 998 1 85,070.19 1 $ 142,21 12/27/1998 84,504.38 $ 140.99 1/27/1999 83,938.53 $ 139,76 2/27/1999 83,372.70 $ 138.53 3/27/1999 82,808,87 $ 137.31 4/27/1999 62 241.04 $ 138.08 5/27/1999(81,875.211 $ 134,88 6/27/1999 61,109,381 $ 133.63 7/27/1999 80,543.55 $ 132.40 8/27/1999 59,977.72 $ 131.18 9/27/19991 59,411.89 $ 129.95 10/27/1999158,846.06 $ 128.73 11/27/1999 58,280.23 $ 127.50 12/27/1999 57,714,40 $ 128.27 1/27/2000 57,148.57' $ 125.05 • 2/27/2000, 58,582.74 $ 123.82 3/27/2000 58,016.91 $ 122.60 4/27/2000 55,451,08 $ 121.37 5/27/2000 54,885.25 $ 120.14 8/27/2000 54,319.42 $ 118.92 7/27/2000 53,753,59 $ 117.69 8/27/2000 53,187,78 $ 118.47 9/27/2000' 52,821.93 $ 115.24- 10/27/2000 52,058.10 $ 114.01 11/27/2000 51,490,271 $ 112.79- $ 3,822.42 • Page 1 1