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4. Redevelopment Loan Program201 1 st Avenue East Kalispell, MT 59901 Phone: 406.758.7738 Fax: 406.758.7758 City of Kalispell • www.kalispell.com Office of Community & Economic Development MEMORANDUM TO: Mayor Tammi Fisher And Kalispell City Council FROM: Jane Howington, City Manager Wade Elder, Revolving Loan Fund Manager SUBJECT: Kalispell Redevelopment Loan Program MEETING DATE: BACKGROUND: The City of Kalispell's Revolving Loan Fund Committee is proposing a loan program similar to the successful and popular Fagade Loan program done in the 1980's. The idea is to help stimulate the local economy by providing an attractive loan program and to use some of the funds available in the Revolving Loan Fund Program (RLF) since there has not been much call for Gap lending activity recently. The RLF's proposed budget for FY 2011 has $225,000 allocated for lending in fund 2880 and there is $2501,524 of cash available in the fund account. As a note there are additional funds budgeted for loans in FY 2011 of $300,000 'in the other 2 RLF funds, so there are loan dollars available for other programs as well. There was input asked for and provided by the Kalispell Business Improvement District (BID) when researching this project. The Program Highlights are as follows: Eligible businesses are those within the Kalispell City Limits. ■ Loans for improvements to real estate not just facade loans,., including weatherization of properties etc. • A lien on the property being improved is required. If a tenant is applying for the loan the landlord must sign the documentation for recording a lien on the property. ■ Funds allocated for the program: $225,000.00. • Maximum loan size to any business: $50,000.00. • Interest Rate: 3.00%, fixed. ■ Loan Costs: Application Fee $100.00 + Costs (approximately $200 for Lot Book, Recording of DOT etc.). • Loan Term up to 120 monthly payments (10 years). No balloon payments, loans are completely termed out. 0 First payment starting date; 80 -100 days from signing documents. "'COMMENDATION: Staff is recommending that Council find that it is in the best interest of the loan program, the local economy and the businesses of Kalispell to offer this program.. FISCAL IMPACTS: The Revolving Loan Fund would earn more interest on the proposed loan program than sitting in deposit accounts and at the same time provide a program that works to promote and/or retain employment within the local economy. Respectfully submitted, Wade Elder, Revolving Loan Fund Manager Jane Howington, City Manager 2