Loading...
HomeMy WebLinkAboutMinutes - 03/06/2017 - Finance and Personnel CommitteeREVOLVING LOAN FUND COMMITTEE MEETING REPORT Monday, March 6, 2017 Council Chamber, 6*15 p.m. In Attendance at Roll Call: Committee Members: Mayor Low, Chairman Alderman Wimmer, Alderman Condon and Alderman Curry. Absent: None. Also in Attendance: City Administrator Morefield, Director of Economic Development Martin, Director of Finance Lynch and City Clerk Jones, Alderman Schaefer arrived at 6:20 pm and Alderman Santi arrived at 6:40 pm. Public In Attendance: Applicants Jimmy Bellavia, and Christy Steinmeier of Jimmy Bread & Brew. 1. Call to Order: Chairman Alderman Wimmer called the meeting to order at 6:15 p.m. 2. Public Comment: None. 3. Discussion Regarding Revolving Loan Application Jimmybread and Brew Director of Economic Development Martin reiterated that the purpose of the Revolving Loan Program is to provide low interest loans to qualified, existing and/or prospective businesses within the City of McHenry. The loan proceeds can be used to assist in the start-up of a new business, expansion of an existing business, updating of an existing facility to make the business more competitive or to provide an incentive for businesses to relocate to the City. He stated that the primary goal of the program is job creation and the expansion of the sales tax and property tax base. He informed the Committee that the program was established in the late 1980's with funding from a State of Illinois grant. The Revolving Loan Fund is not tax dollar money and the money loaned through the Revolving Loan Fund cannot exceed the balance in the fund at the time of the request. The current available lending balance in the Revolving Loan Fund is approximately $66,000. Director Martin advised the Committee that James ("Jimmy") Bellavia and his partner, Christy Steinmeier, on behalf of Jimmybread and Brew, has submitted an application to obtain a loan for $55,000 for the working capital. They intend to use the money, together with investor dollars, to build a business at 3425 Pearl Street in the City of McHenry. It is Jimmybread and Brew's intention to promote a brand utilizing fresh products and ingredients, artisan style baking and a good quality of food. Director Martin informed the Committee that Jimmy and his business partner, Christy (a trained chef), are committed to growing the business, which already has awell- established customer base, however they currently lack a permanent location. Jimmy has Revolving Loan Fund Committee Meeting March 6, 2017 Page 2 been a part of the McHenry Farmers Market and has assisted in drawing other businesses to the Market. The Committee reviewed and discussed concerns expressed by First National Bank of McHenry, who is conducting underwriting services for the proposal loan application. Should the City of McHenry enter into a Loan Agreement with Jimmybread and Brew the bank recommended that the following should be considered by the city: 1. Securing the Loan with first lien purchase money security interest in the business assets purchased (i.e., fixtures and equipment); 2. No disbursement of City Loan Funds unless and until all investor group seed funding of $145,000 has been validated and deposited as start-up funding for the enterprise; 3. An unlimited and personal guarantee from James Bellavia and Christy Steinmeier; 4. Personal and business financial statements be submitted annually; 5. Loan be repayable on a monthly basis, over a five-year term at 3.75% fixed rate of interest with no prepayment penalty; and 6. The City would buy back the Loan (after reassignment by First National) if the Loan payments become delinquent for more than 60 days. Director Martin stated the applicants fit the parameters of the program and he concurred with the banks recommendations. Responding to an inquiry from Alderman Curry, Ms. Steinmeier clarified that the restaurant would be on the first floor of the premises and the baking would take place on the second floor. Alderman Curry inquired about where the produce would be planted and Mr. Bellavia answered it is their intent to remove the asphalt from the parking lot and grow the produce in that area, which would then be sourced to the restaurant. Jimmy and Christy responded to Alderman Curry's inquiries regarding investment, financing and equipment purchases. Responding to Chairman Alderman Wimmer's inquiry, Mr. Bellavia stated they hope to open in late May or early June 2017. Mayor Low opined that she appreciates the bank's expertise and concerns. She stated Mr. Bellavia's product is outstanding and he has a unique concept. Mayor Low expressed confidence in the applicants' ability to market the business and succeed. Alderman Curry expressed some concerns regarding the financial aspect of the venture and said he intended to consider the matter further prior to voting at the Council level. Alderman Condon opined that it appears to be an exciting project and she looks forward to the success of the venture in the City of McHenry. Revolving Loan Fund Committee Meeting March 6, 2017 Page 3 Motion by Condon, second by Curry recommending approval of the application submitted by Jimmybread and Brew for a Revolving Loan for $55,000, and directed staff to work with representatives of First National Bank of McHenry to facilitate the Loan subject to the terms and conditions as presented; and, to bring the matter forward to the full City Council for consideration. All voting aye, motion carried. 4. Adiournment Motion by Condon, seconded by Curry, to adjourn the meeting at 6:48 pm. All voting aye, motion carried. Reviewed and approved this day of IAD j 2017.