Wouldn’t you love a 1.5 million dollar loan interest free?
That’s exactly what appears to be what is going to happen for Southwyck Mall:
There will be no interest during the first year of the loan and the rate will increase to 5 percent the following year.
This is despite the concerns expressed and what was posted before about the Agenda Review Meeting:
Yes, this means that he’s (Council President Sobczak) in support of the loan being as it is absent checking with other communities to see what type of a rate of return they asked for when they made loans.
That was an easy google search to find that the going rate is as this example shows 5% per year with three years to pay off the loan as far back as 1999. Illinois charges a simple annual rate at one-half the
market interest rate, but not less than 2.50 percent with the payment time period no longer than five years, though payments do not start until 12 months after the money is disbursed. Arizona charges 3% percent with a repayment period of up to five years, or 4% with a repayment period between five and ten years, subject to change based on the current prime interest rate.
And despite what Councilman Michael Ashford shared at last week’s council meeting as to what the original intention was for this EPA loan program was:
…the EPA Revolving Loan of 2 million dollars was solicited from the EPA under the conditions that it would be used for disadvantaged/blighted Central City brownfield projects associated with New Schools/New Neighborhoods program. He also had copies of the original grant and those who originally supported the request for the EPA funding, this included letters from Lagrange Development Center, Toledo Lucas County Plan Commission, Toledo Alliance, Toledo Area Chamber of Commerce, National City Bank, Syke Bank, Central City and River East.
I understand the aspect of using the money that was granted in 2004, however, by giving the Southwyck project the full 1.5 million dollars that is set aside for brownfield projects, until it’s paid back it can’t be used for any other project, including the original program it was intended for that was underfunded through other Toledo funding sources, the New Schools/New Neighborhoods project. The remaining $500,000 is designed for petroleum related projects.
I also think it’s been demonstrated that most other cities and states do charge interest…
“under the conditions”
One can only wonder if this was a casual clause, or one of the, this loan shall be used for…..
The older neighborhoods need attention also.
They are fast becoming picture postcards for the plywood industry, while the administration fiddles and diddles with trying to restore a once, thriving retail center, back to its glory days, many decades ago.
Councilman Ashford’s district is sorely in need of attention, but the administration seems to turn a blind eye to the needs.
August 22nd, 2008 at 3:48 pmCouncilman Collins, not invited to press conference, shows up anyway.
The whole broo ha-ha about keeping information away from council, came to head at the ESM meeting and administration members, Reinbolt and Kroma, both admitted publicly that the administration failed to communicate properly.
How many times does one get bit, before one stops trusting to the other side or person?
Apparently the admissions of failures of communication, meant little when the Chief Executive sticks to his ways.
August 22nd, 2008 at 4:07 pmWhere do I find the forms to fill out to apply for these loans? Are they on a secret internet site?
August 22nd, 2008 at 8:49 pmForms? C’mon Skeeter, Dillin didn’t have to fill out any forms!
Didn’t you see Dillin’s late night informercial…
“How to get rich off city money, get free land with no money down”???
August 23rd, 2008 at 3:33 amLarry Dillin is seeking a Brownfield Remediation Loan from Toledo’s Brownfield Remediation Revolving Loan Fund (RLF). The money that funds the RLF comes from a grant from the USEPA. The specific purpose and guidelines of the Revolving Loan Fund (RLF) were developed locally and contained in a successful proposal submitted by The City of Toledo (to the USEPA in 2003 or 2004.)
The idea behind Toledo’s RLF is that Toledo, like many other older industrial cities, is a weak market city. We are having a hard time attracting developers and investment and one of the reasons is that we have contaminated land that needs to be cleaned up before development can take place. Clean up costs result in additional expense that does not exist at clean greenfield site in the suburbs. Further, it is a lot to expect a developer who was not responsible for the original contamination, to assume that additional expense—and many choose not to—instead they go right to the greenfields. So in order to make the contaminated sites located in our older urban areas more competitive, we need programs like the RLF to help fund that clean-up.
While I said that it is not reasonable to expect the developer to foot the bill for the clean-up, in our case, the developer is ultimately paying for the clean-up—because we have a loan program. Many other jurisdictions are able to offer grants for clean up—we don’t have that luxury. So instead of a grant, our program was designed as a no interest revolving loan fund, which, when the money is repaid to the RLF, it is recycled into additional loans.
The City’s USEPA funded RLF is for sites located in Brownfield Impact Areas (basically, CDBG eligible areas) within the City of Toledo. While Southwyck Mall was probably not a part of a Brownfield Impact Area when the program was originally developed, that has since changed. In addition, the RLF was to be used for neighborhood development projects that were associated with the New Schools New Neighborhoods (a specific program that partners with CDCs to leverage investment in a new school building into a neighborhood revitalization project) program. While we have three New Schools New Neighborhoods (NSNN) projects underway (and potentially more in the future), none require, or are ready, for funds from the RLF.
There are looming deadlines for putting our RLF to use. We have to make some loans, and get that fund revolving—so that next round loans can be used for NSNN projects. We don’t want to have to return the funds to the USEPA .
Rather that being critical of the city for awarding no interest loans (from a no interest revolving loan fund), we should be watching to make sure that the terms of the loan are such that the funds will be repaid as quickly as possible and that they minimize any risk of default.
August 23rd, 2008 at 10:39 amI have often thought or questioned, why we the tax payers have to foot the bill for a private business that is allowed to pollute, contaminate and virtually ruin the land, air and water.
Then I remember that we need to allow them greater flexibility, less regulation, less rules, etc.
And in the end, we, the tax payers pay for the clean up, while the businesses either move, litigate for decades, like W.R. Grace, etc.
August 23rd, 2008 at 10:52 amSue, thank you for your post, you raise a very valid point when it comes to the repayment aspect as well as provide some helpful background information. There has not been much focus on the guarantee of re-payment aspect that I am aware of.
I understand the desire of the Mayor and City Council to not lose this loan fund, but there are other areas that are experiencing weak markets that have utilized charging interest as a way to make a small increase in the total amount of the money that is available to loan to others.
My other concern is that the whole amount available for brownfield will be held up until this loan is repaid. I could understand as an example offering a million, but leaving some money in the loan fund that could be used by the CDC’s rather than having them have to wait until repayment begins and enough is repaid for them to be able to have access to the loan dollars.
August 23rd, 2008 at 1:55 pm