City Beat: Federal grant, loan may aid redevelopment

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By 2005, Springfield architectural firm Butler, Rosenbury & Partners hopes to be operating from the former Universal Paint plant on North Main Avenue an abandoned building for the past 12 years, which is located in the development path of Jordan Valley Park. But first, city officials must secure financing for the buildings owner, Springfield developer Scott Tillman.|ret||ret||tab|

City Council considered a joint U.S. Department of Housing and Urban Development grant and loan at its Oct. 27 meeting to facilitate redevelopment of Butler, Rosenbury & Partners future home, as well as the former MFA Mill on Boonville, which is owned by the city of Springfield. Both buildings are vacant eyesores in Jordan Valley Park.|ret||ret||tab|

Council will vote Nov. 10 whether to accept an $8,085,000 HUD loan and a $1.2 million Brownfields Economic Development Initiative grant from HUD.|ret||ret||tab|

The two sums will work together in redevelopment, but the $1.2 million BEDI grant cannot be spent on the project. The grant allows the city to buy security for the $8 million loan an advance of Community Development Block Grant monies, Finnie said.|ret||ret||tab|

What we would do is use the $1.2 million to, for example, get a letter of credit that would cover that loan for the first few years of development, Finnie said. That way, we have guaranteed the loan and if the project doesnt work out, the letter of credit pays off the entire loan and we are held harmless in terms of future CDBG money. We were very fortunate to get this.|ret||ret||tab|

Tillman is seeking a $2,585,000 Section 108 HUD loan through the city for his estimated $3.2 million project.|ret||ret||tab|

The entire project is contingent upon getting the financing that the city is working on, Tillman said. It could all work out fine (or) it could all fall apart.|ret||ret||tab|

Despite solid plans, the city is assuming a risk in the venture: if the projects are unsuccessful and developers fail to repay the city, the city could lose future CDBG monies. HUD requires future CDBG funds to be pledged for security, according to the bill council heard during the meeting.|ret||ret||tab|

The real key to this is to make sure that you structure a good financial deal with the developer on both of those buildings, Finnie said to council. That will come back to council for approval. So even though we have the ($1.2 million BEDI grant) to help secure the loan, its equally important to make sure its a good loan in the first place with a high likelihood of being paid off.|ret||ret||tab|

Tillman acquired the Universal Paint property, 319 N. Main St., last year. Butler, Rosenbury & Partners is committed to moving into the top two floors, according to the bill.|ret||ret||tab|

Thats the plan, but its all based on getting this grant and financing in place, Tillman said, adding that restaurant and retail space is planned for the first floor.|ret||ret||tab|

Tillman has redeveloped four downtown properties in the last five years at a cost of $4 million, including spaces for such businesses as Agrario, Patton Alley Pub, Well-Fed Head Books, Springfield Glass Works and the former Churchills, which he said should have a new tenant this month. Tillman is currently renovating the former Mansfield Opera House on South Avenue. It is 60 percent complete, he said.|ret||ret||tab|

Thats the biggest project so far that Ive done, he said. Weve got several people that are interested in space.|ret||ret||tab|

City officials continue to seek private development proposals for the 100,000-square-foot former MFA Mill at 524 Boonville Ave. The city acquired the mill in May for $100,000, available through $1.99 million in HUD Economic Develop-ment Initiative appropriations U.S. Congressman Roy Blunt secured for the city.|ret||ret||tab|

Targeted uses for the MFA property are mixed-income housing and offices.|ret||ret||tab|

Finnie is optimistic private developers such as Tillman can make these projects successful.|ret||ret||tab|

Im optimistic that we will get both of those developments to work, Finnie said.|ret||ret||tab|

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Tax renewals|ret||ret||tab|

Also on councils plate is a special election asking voters to extend current levels of city property and capital improvements sales taxes.|ret||ret||tab|

The citys current level of property tax is 27 cents per $100 assessed valuation. If continued, the level property tax is expected to generate $31.5 million, earmarked as follows: $13 million for stormwater improvements; $5 million for public safety improvements; $5.5 million for city facility improvements; $5 million for Vision 20/20 recommendations; and $3 million for contingency/administration, according to the bill.|ret||ret||tab|

The citys quarter-cent capital improvements sales tax was first approved in 1989, followed by subsequent citizen approved referendums in 1992, 1995, 1998 and 2001. City officials are asking for another three-year extension to largely fund transportation and park improvements. If approved, the sales tax would finance approximately $26.6 million in capital improvements through 2007. The citys continued project list includes widening of Fremont, Jefferson, National, Republic and Walnut Lawn. Also included are improvements to the National and Primrose intersection. The city would allocate $2 million for new sidewalks near schools.|ret||ret||tab|

A new priority project on the list is a targeted neighborhood improvement program to cure blighted areas in the amount of $1.6 million.|ret||ret||tab|

No members of the public spoke at the meeting.|ret||ret||tab|

If approved by council, the special election for both taxes would be held Feb. 3. A majority vote of the people is required.|ret||ret||tab|

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