Grand Rapids Economic Development Authority Redevlopment Loan Fund

Financing

Services: Incentive and Financial Resource Programs

Contact: Rob Mattei, Director- Community Development

Address: 420 N Pokegama Ave , Grand Rapids, MN 55744

Phone: 218.326.7622

Email: rmattei@ci.grand-rapids.mn.us

Description:

The purpose of the Redevelopment Loan Fund is to provide short-term near market rate loans for the acquisition of properties necessary for the completion of downtown redevelopment projects aimed at correcting or replacing existing blighted/substandard buildings. These loan funds are intended to be replaced by private commercially available financing at the earliest point possible.

Loan Amounts
The Redevelopment Loan Fund is a revolving loan fund of $1,000,000. The maximum loan amount is only limited by the current balance of the fund.

Eligible Applicants
Developers proposing redevelopment projects, in the City of Grand Rapids, that have received the necessary approvals to be considered eminent, but have yet to obtain sufficient level of tenant commitment to obtain conventional financing.

To qualify for funding, each project is subject to an agreement which requires the Grand Rapids Economic Development Authority (GREDA) approval of a developer financing plan that will be used to replace developer loan funds with commercial or other funding.

Other Special Requirements
Agreement: Approved loans will be made subject to loan agreements between private developers and the GREDA.

Security: The GREDA will secure each Loan Agreement by a mortgage on the properties acquired with developer loans, to mitigate risk in the event a project fails after the property is acquired, and a promissory note.

Business Subsidy: Depending on the loan amount, these loans may constitute a business subsidy under the Business Subsidy Act, and, if so, the borrower must submit to the GREDA an annual written report regarding business subsidy goals.

Allowable Use of Proceeds
Land acquisition for economic development and redevelopment activities in Grand Rapidsm and for projects that result in the redevelopment or removal of blighted or substandard buildings and the creation of new or improved commercial or residential development.

Term of Loan
18 months or less, or, if used in conjunction with private financing as a second mortgage, for a term of 5 (five) years with a 20 year amortization.

Interest Rate
The GREDA will make developer loans at competitive near-market interest rates, provided that no Developer Loan shall bear interest at less than 0.25% over Prime.

Grand Rapids Economic Development Authority Redevlopment Loan Fund serves the City of Grand Rapids.