Banks propose crime lab funds

A possible solution was presented at the Jan. 17 Springfield City Council luncheon.

Brian Fogle, director of community development for Great Southern Bank, proposed on behalf of 13 area financial institutions a loan to cover the cost of renovations to the targeted crime lab site: the former L.E. Cox Building at 440 E. Tampa.

The terms of the deal are favorable for the city and the county. The loan amount on the table would supplement $1.5 million in committed federal funds for the project. The interest rate on the loan would be 70 percent of the London Interbank Offered Rate one-month rate at the time the loan is approved; on the day of the presentation, the rate would have been 3.14 percent.

Payments on the loan, expected to be around $2 million according to Fogle, would be interest-only for the first five years. The city and county have the option of paying off the principal during that time, through additional grant money or other revenue, or refinancing the loan to a more conventional 20- or 30-year term.

City Manager Tom Finnie said that while the offer was not totally unexpected - Fogle had approached city staff previously about the idea - the presentation came as a pleasant surprise.

“(Fogle) felt there was an opportunity to put together a group of the lending institutions, and I said I thought (City) Council would welcome at least the opportunity to consider something like that,” Finnie said,” noting that the offer is a loan, not a gift. “They were very favorable loan terms, (but) they're not giving away money to us.”

City Council has asked Finnie's office to meet with bank officials to further discuss the details and mechanics of a possible deal. He said that meeting could happen as early as the week of Jan. 23, after which a formal presentation would be made to council and the county commissioners to decide how to proceed.

Partnership financing

If accepted, Fogle said the project would not be the first time competing lenders have worked together to give back to the community, pointing to the Partnership Industrial Center and Springfield Business Development Corp.

“We can set aside our competitive nature and do something to fulfill a need,” Fogle said.

Eight of the 13 banks also are involved with the Partnership for Economic Development, the group that created the Partnership Industrial Center idea in 1990, and are investors in Partnership for Prosperity, the SBDC's five-year community development initiative.

Rob Bratcher, Springfield market president for Bank of America, said he was slightly surprised at the number of banks participating - surprised that the number wasn't higher.

“Given how competitive the landscape is, I'm surprised that other banks haven't stepped up yet,” he said. “But I think others will join in. It's not a matter of making money - no one is here to make money off of this. This is bringing the resources of our institutions together to make sure we don't miss the opportunity to use those federal and state dollars to put this program together.”

He added that government leverage is another key aspect of the program.

“Usually it's the other way around - companies have an idea and then you cross your fingers hoping the government comes to the table,” Bratcher said. “Here, we know that money will be allocated, assuming we can do our part. It was an easy rally cry to get behind for those financial institutions.”

The Springfield Area Chamber of Commerce recognized the benefits of the proposal. The chamber wrote letters to the banks and facilitated a Jan. 13 meeting that led to the proposal.

Chamber Executive Vice President Brad Bodenhausen said the chamber's support of the proposal stems from its support of the Community Safety Initiative last year, adding that the group of banks working together reinforces the importance of the issue.

“Having organizations that are normally competing against each other recognize a need and get beyond that competition underscores that the business community thinks this is an important issue and is trying to come up with an approach to make it happen,” Bodenhausen said.

Great Southern's Fogle said the return on investment for the banks is indirect - but very real.

“Our banks are only as strong as the communities we serve, and by getting the crime lab here and helping the legal and justice system, we hope that might lower the impact on the jail and help law enforcement. The entire community benefits from that,” he said. “While this is not what you'd normally consider an economic development benefit, it's certainly a quality of life benefit for our community.”

The 13

These lenders have banded together to offer an approximately $2 million loan to Springfield and Greene County for crime lab development. The offer on the table requires interest-only payments for five years. The interest rate on the loan would be 70 percent of the London Interbank Offered Rate one-month rate at the time the loan is approved; on the day of the presentation, the rate would have been 3.14 percent.

Bank of America

Citizens National Bank

Commerce Bank

Countryside Bank

Empire Bank

Great Southern Bank

Guaranty Bank

Liberty Bank

Mid-Missouri Bank

The Signature Bank

UMB Bank

US Bank

Village Bank

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