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HomeMy WebLinkAboutMinutes - 9/16/1998 - Revolving Loan Fund Committee �t REVOLVING LOAN COMMITTEE MEETING September 16, 1998 Members Present: Chairperson Mayor Cuda, Alderman Murgatroyd, Alderman McClatchey, Absent: Alderman Baird Others Present: City Administrator Lobaito, City Attorney McArdle, City Clerk Althoff, Alderman Glab, Petitioner Joseph Rubino D & J AUTOMOTIVE Revolving Loan Chairperson Mayor Cuda reconvened the Revolving Loan Committee Meeting at 7:10 p..m. on Wednesday, September 16, 1998 noting the � meeting had been recessed Tuesday, September 15, 1998 at 8:10 p.m. In response to Alderman Murgatroyd's inquiry, Petitioner Joseph Rubino explained the two outstanding bank notes referenced in his loan appliaatio�n, �n the amounts of 542,000 and 550,000 were notes obtained to purchase additional inventory and cover operating expenses. These notes are secured with reaf estate property located in Crystal Lake. The only debt on the proposed collateral property is the existing mortgage with First Midwest Bank. Some discussion followed regarding the loan amount and interest rates. Revolving Loan Chairperson Mayor Cuda cited the unusually long period of time between Mr. Rubino's initial loan application request and the committee's review of said application. Revolving Loan Chairperson Mayor Cuda noted the delay was due, in most part, to the pledging of these revolving loan funds to Fabrik, a manufacturing facility located in the City of McHenry's Corporate Business Park. Fabrik President, Seth Wagner, just recently released the City from their revolving loan pledge permitting the reconsideration of Mr. Rubino's application. It was the suggestion of staff to consider the total project cost for S 176,000 which includes the two notes in the amounts of 542,000 and 550,000. The loan amount request would then be for the 550,000 maximum. Alderman Murgatroyd noted without the loans the total project cost would be reduced to $84,000 allowing a `.- loan amount of only $42,000 because of the 50% matching requirement. Staff also recommended a loan term of five years with the $50,000 loan amount Revolving Loan Committee Meeting � September 16, 1998 Page Two amortized cver 20 years with a balloon payment of no more than 50% at the end of the term, Staff also suggested a sliding interest amount of 3% the first three years, 4% year four 5% year five. Staff also noted the petitioner would be responsible for all attorney fees and closing costs incurred during the loan process. Motion by McClatchey, seconded by Murgatroyd, to recommend to full council the approval of a 550,000 revolving loan to Joseph Rubino of D & J Automotive, McHenry, Illinois with a five year term amortized over twenty years with a less than 50% balloon payment at the end of year five and sliding interest rate of 3% the first three years, 4% the fourth year, 5% the fifth year taking a second position behind mortgage holder First Midwest Bank on the building and property located at 926 N. Front Street, McHenry, Illinois, PIN # 09-35-104-002. Voting Aye: Cuda, McClatchey, Murgatroyd � Voting Nay: None Absent: Baird There being no further business the meeting was adjourned at 7:26 p.m. ��-� ,,,, ,;� , Pamela J.Althof , �ity � erf , �