Uptown Business Loan Program
Uptown
Business Loan Program Form [PDF]
Uptown Business
Loan Program Brochure [PDF]
I. Introduction
From April 1986 through September 1989, the Town used more than $20,000.00 of Community Development Block Grant (CDBG) funds to provide loans to uptown businesses. The purpose of these loans was to encourage building owners/tenants to bring their properties up to current building and fire codes and to enhance their appearance. Due to constraints placed on CDBG funds by HUD, this program ended in 1989.
Although the initial funding source is no longer available, the Mayor and Council continue to believe that the Central Business District, with its unique collection of turn-of-the-century buildings, is a viable area of the Town worthy of preservation. The Mayor and Council believe that providing financial assistance, in the form of below-market-interest loans, is in the public interest and that the Town has a responsibility to share in the preservation of the uptown. In addition, improving the building stock in uptown Normal is a critical part of the overall Uptown Renewal Effort.
II. Purpose
The Uptown Business Loan Program is designed to ensure that funded projects further the goals of the Uptown Renewal Plan and comply with all Town ordinances, in particular the Uptown Design Ordinance. In addition, projects are evaluated with the following criteria:
- Structural stability. No loans would be approved for buildings that the Building Inspections Department deems to be structurally unsound unless the loan funds will address the structural problems.
- Code compliance. Projects seeking to address life/safety problems would be given a high priority.
- Significant properties. High priority would also be given
to properties of architectural, historic, or cultural significance.
The uptown renewal goals can be accomplished by making funds available at below-market interest rates in a cooperative effort between the Town and the Bank of Illinois.
III. Eligible Properties and Projects
In order to be eligible for the program, projects must be capital improvements planned for properties located within the B-2 Central Business District. In addition, the Uptown Design Review Commission must approve the project prior to the commitment of any Town funds. Their approval will be based on the criteria listed in the previous section.
IV. Loan Policy
- Funding
- The Town will “buy down” 3% of the interest on approved loans. The interest on the Bank’s investment shall be at a maximum of 2% above commercial prime lending rate.
- The Town shall commit up to $10,000 for the program annually. The minimum loan amount shall be $20,000. The maximum loan amount shall be $100,000. The maximum term of the loan may not exceed 10 years. The Town Council may approve loans that exceed the maximum, based on availability of funds and other considerations.
- The Bank shall establish the payment arrangement with
the borrower according to usual and customary banking practices.
Town agrees to make annual payments to Bank of an amount
equivalent to an interest rate of 3% on the outstanding
principal due and owing for the year on each active
Uptown Business Loan carried by the Bank.
- Application
When application for a loan under this program is made to the Bank, the Bank shall begin processing the loan and shall also notify the applicant that he/she must submit a description of the proposed work to the Town Clerk on the official application form. (See attached Town of Normal application form.) The Bank’s preliminary approval shall be based on usual underwriting criteria; however, final approval will be contingent upon the Uptown Design Review Commission’s approval of the plans. If either the Bank or the Uptown Design Review Commission denies the loan request, they shall promptly notify the other and the applicant.
Applications shall be processed in the order received, contingent on availability of funds. Waiting lists will be established as necessary. Borrowers must apply to the Bank of Illinois, which will process the application in its usual course of business.
- Term
The maximum term of the loan shall be ten (10) years.
Loan Approval Process
- The loan process begins with the Bank. Applicants may work
with any Bank designated as a depository in Sec. 2.3-45 of the
Municipal Code. Prospective applicants should contact the Bank
for loan application materials, which will be evaluated by the
Bank according to customary banking procedures.
- After the applicant has obtained approval from the Bank,
the applicant should fill out an application for the Town of
Normal Uptown Business Loan Program. See attached. The completed
application should be submitted to the Town Clerk along with
an inspection of the site by a licensed architect or structural
engineer to verify that the building is structurally sound and
that all major building systems, such as electric, HVAC, fire
protection, and plumbing, are functioning safely. All code deficiencies
shall be noted. The Town will not participate in a loan for
a building deemed structurally unsound or seriously deteriorated
unless the loan funds will be used to address these problems.
- Town staff will review the application and will then forward
the application with a recommendation regarding the loan to
members of the Uptown Design Review Commission before the
Commission’s next regularly scheduled meeting. In order to obtain
a staff review, applicants will need to provide sufficiently
detailed project information to Town staff. These details must
include all requirements set forth in the Uptown Design Review
Ordinance for projects impacting the exterior of a property.
For interior projects, Town staff will need all of the information
generally required for the Building Inspections process.
- The Uptown Design Review Commission will review the application
at its next regularly scheduled meeting. The commissioners will
attempt to act upon the loan request at this meeting; however,
the Commission may request additional information from the applicant
or delay final action on the loan request for other reasons.
- The maximum loan amount that the Town will fund is $100,000.00
and the minimum is $20,000.00. The maximum loan term on a loan
with Town assistance is 10 years. Applicants may seek a waiver
from these requirements from the Town Council.
- After the Commission approves the application, all change
orders must be approved by the Uptown Design Review Commission
chairperson in writing. If the applicant at any time deviates
from the requirements set out by the review committee and fails
to obtain a valid approval for such deviations, the loan assistance
provided by the Town will no longer be available. If, during
the course of the project, unforeseen difficulties increase
the cost of the project, the applicant may seek expedited review
of a request for additional funds as long as the applicant has
not already received the maximum loan amount available. The
design review commission chairperson and a Town staff representative
will conduct the expedited review.
- If the project funded by the loan requires a Certificate
of Compliance under the Uptown Design Review Ordinance, the
applicant must obtain the Certificate of Compliance from the
Uptown Design Review Commission prior to starting the project;
however, it is not necessary that the Certificate be obtained
prior to filing an application for a loan.
- Necessary building permits must be obtained before work
begins. Questions regarding building permits should be directed
to the Town of Normal Building Inspections Department.
- After receiving approval from both the Town and the Bank,
loan applicants will deal exclusively with the Bank in repaying
the loan. The Town and the Bank will make arrangements for the
Town’s “buy down” of a portion of the loan interest.
- The Uptown Design Review Commission reserves the right
to deny any loan application.
- Recipients of any loan grant funds must agree to observe
all applicable federal, state, and local laws pertaining to
the use of loan funds.
- The Uptown Design Review Commission reserves the right to prioritize the applications on the basis of the location of the project, the extent of the work, the level of private funding and the relative impact of the proposed improvements on the area. In addition, the Commission reserves the right to reject any applications regardless of the availability of funds or compliance with the Uptown design ordinance.
Submit completed applications to:
Town Clerk
100 E. Phoenix Ave.
Normal, IL 61761
(309) 454-2444
Address all questions to Lauren Sunkel, Associate Town Planner, at (309) 454-9623 or via email at lSunkel@normal.org.