Springfield, MO

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by Barbara Radford-Kapp

SBJ Contributing Writer

Banks aren't the only game in town when it comes to financing building renovation. The city's Department of Planning and Development offers several loan programs to help revamp center city.

Ann Peck, community development loan officer for the city, serves as administrator for most of those programs and helps borrowers determine if their projects and city funds are a good match.

Peck started out 15 years ago as an accounting technician for Planning and Development. She returned to school at Drury in 1990 to complete a master's in business administration, and in 1993, she was named city loan officer.

Peck takes a hands-on approach to each loan application and remains involved in every step of the loan process.

Springfield, as a federal entitlement city, receives approximately $2.1 million in community development block grants each year. The Planning and Development Department competes for those funds to cover its loan programs.

The Small Business Development Program provides fixed loans at 5 percent interest to either acquire property, for which a borrower must create a certain number of jobs, or renovate property within a designated geographic area.

For Springfield, that area falls between Grand Avenue to the south, Kearney Street to the north, Highway 65 to the east and Highway 160 to the west. "The small business program is very popular," Peck said. "We get our money in July and usually by October it's gone. It makes projects happen that otherwise wouldn't be feasible," she added.

The facade loan program provides up to $20,000 for storefront renovation.

Applications for these loans are reviewed by the Urban Districts Alliance, which then makes a recommendation to the city loan committee.

Residential programs include the rental housing program, HOME, designed to create affordable housing for low- to moderate-income renters. These funds are available only for renovation, and upon completion, the city sets a maximum rent based on local fair market values.

"The terms for HOME loans are flexible" normally 50 percent of the loan is amortized at 5 percent for 15 years and 50 percent is deferred. We must verify the renter's income annually, and borrowers must provide equal opportunity for potential renters," Peck said.

Although most of these loans are for single-family housing, occasionally the city takes on a bigger residential project. Currently Peck's department is working with The Kitchen on rehabilitation of the Franciscan Villa on West Scott Street. The third floor is being converted into low-income housing for the elderly.

The Owner-Occupied Rehab Program also provides residential loans for low- to moderate-income homeowners to renovate the homes in which they live. Peck and the city work closely with not-for-profit organizations like Ozarks Area Community Action Corporation, the Affordable Housing Action Board, Habitat for Humanity, the Sherman Avenue Neighborhood Association and other center city neighborhood groups to determine the best use for home loan dollars.

Peck said the city is delighted to be part of the recent renaissance in center city renovations. The Small Business Development Program recently provided gap financing for Randy Ebrite and Mike Cochran to turn empty space above The Open Book on Commercial Street into spacious loft apartments and restore the building's facade.

Courtney Moore's building in the 400 block of West Walnut is a city rehab project and will provide retail space and a loft apartment. The city provided facade funds for the soon-to-be-remodeled Red Onion restaurant and The Bar Next Door, owned by Matt Miller.

Peck said the city was also looking forward to working with David Kellett and Dan Scott on their building, which recently burned, at the corner of Jefferson and Walnut.

In the spring she expects construction to begin at 1021 E. Walnut Street. Nancy Brown and Craig Wagner, principals of Walnut Investments Inc., plan to turn the old home next to Ebbet's Field into retail and office space.

Not all entitlement cities use their funds for these types of projects, but Peck reported that the regional Housing and Urban Development program frequently uses Springfield as a model for development loan programs.

"We're always sending out our rules and regulations to other cities to help them develop their own programs," Peck said. In fact, Springfield Planning and Development recently received a "Best Practice" award from HUD for economic development, consolidated planning, overall assessment, continuum of care, decent housing and reporting.

Peck estimates that the city loans $1.5 million per year through its programs. Springfield also collects approximately $500,000 a year which goes back into the loan fund. "Once those program funds come back in, we reloan them, so our portfolio is growing all the time," Peck said.

She will also package loans for the new Springfield Finance and Development Corporation (SFDC), the financial branch of the Urban District Alliance. The SFDC offers market rate loans of $5,000 to $75,000 to small businesses in center city.

"Those funds can be used for many things city loans can't accommodate, such as working capital," Peck said. "SFDC has yet to make a loan through their program, and it's apparent that downtown needs may require the banking consortium to shift its paradigms. In my experience, you have to jump in and see what you can do for center city," she added.

Anyone who is interested in renovating property within the eligible area and would like to apply for a city loan should call Peck for an information packet on the rules and regulations of the programs.

Peck loves the diversity of being a city loan officer. She works with a variety of business owners, rental developers, banks, title companies and appraisers. She said she also enjoys staying in contact with borrowers by servicing the loans.

"Most of all, I enjoy the satisfaction of seeing a project come to fruition after all the blood, sweat and tears, and see an old, forgotten building come back to life," she added.


ANN PECK; Community Development

Loan Officer

City of Springfield

Department of Planning

and Development

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