Heer's building owner Kevin McGowan and his loan company Berkadia Commercial Mortgage missed deadline No. 2 for U.S. Department of Housing and Urban Development approval of the Heer's loan application and have now been given a Nov. 30 deadline.
McGowan's private lender, Berkadia, missed its original Oct. 6 deadline and then missed its self-set Oct. 15 deadline a week later.
Now, Berkadia has been given a Nov. 30 deadline to submit the application for HUD insurance approval. Dale Gray, HUD spokeswoman, said if the Nov. 30 deadline isn't met, HUD would decide what to do next, which would likely be a dismissal of the deal.
McGowan said he is confident Berkadia will file the application in time.
"As we've let folks know before, this is a very complicated application," he said. "We requested a waiver of HUD to give us some additional time to make sure everything was perfect."
McGowan also said the application was all but complete, adding that Berkadia is aiming to submit a first-rate application that will allow for a smooth transition through HUD.
"We want to make sure there are no question marks," he said. "It should be a very easy application for HUD to process, and that's our goal.
"We do not want to risk getting kicked out. We want to get it right."
The Oct. 6 deadline miss meant the Heer's project falls under HUD's new debt service coverage ratio, resulting in an additional $300,000 needing to be presented up front, according to Springfield Business Journal coverage
Joyce Patterson, Berkadia senior vice president of corporate communications, said the company doesn't comment on any loans in progress.
The city of Springfield has promised a $2 million loan for the Heer's project, provided the other pieces of funding gain ground.
Springfield Economic Development Director Mary Lilly Smith further cemented the city's position on the importance of HUD application approval.
"We're anxious for the next step in the project," she said. "Our participation is dependent on the HUD loan guarantee being in place.
"We've been in contact with Kevin McGowan, and he's indicated they're working very diligently on trying to get the application into HUD." Smith noted that while it wouldn't be accurate to say the city would automatically pull out if Berkadia misses its Nov. 30 deadline, the city's loan is contingent on the HUD loan guarantee or some other form of financing.Related links: