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Patrick E. J. Titterington
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City of Troy
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MEMORANDUM
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TO:
FROM:
Patrick E. J. Titterington .
DATE:
November 6, 2014
SUBJECT:
DOWNTOWN BUILDING REPAIR REVOLVING LOAN - 9-11 E. MAIN STREET FOR RYAN &
SARAH McNEILL
RECOMMENDATION:
That an $180,765 loan is approved by Council from the Downtown Building Repair Revolving Loan Fund
(DBR) to Ryan and Sarah McNeill for the purchase of the building at 9-11 East Main Street.
BACKGROUND:
Mr. and Mrs. McNeill submitted an application for a DBR loan for $180,765 for the purchase of the
property located at 9-11 East Main Street (aka Wasserman Building). The Downtown Loan Committee
(DLC) met on November 6, 2014 to review the following application :
The first floor of the property is currently occupied . The DLC review included the public purpose to be
served by the approval of the loan. The upper story floors have been vacant for decades, and the
McNeills have a vision to get the upper story floor occupied with office and residential uses. This
additional capital investment made with private dollars will both greatly strengthen the building as well
as positively influence this block of buildings on the National Register.
The DLC is recommending to Council that a loan be approved to Ryan and Sarah McNeill for the purchase
of the building at 9 - 11 East Main Street based on the following terms:
Page Two
The DLC noted that this loan structure departs from the adopted DBR Guidelines in that the loan amount
exceeds $100,000. With a fund balance in excess of $600,000 the loan fund can accommodate this loan.
Information provided from the DLC meeting is attached.
The goal of this loan program is to provide loans to qualified applicants to improve buildings in the
downtown. As loans are repaid, those monies are then available for other applicants.
REQUESTED ACTION:
It would be appreciated if you would assign to a Committee of Council:
Consideration of a loan in the amount of $180,765 from the DBR Revolving Loan Fund to provide
funding assistance for the applicant to purchase the property at 9-11 East Main Street based on
the terms as recommended by the Downtown Loan Committee. We also ask for consideration of
emergency legislation so that the loan can be closed in a timely manner.
That legislation includes deviating from the DBR Guidelines of a loan amount exceeding $100,000.
encl.
cc:
Mayor Beamish
Mr. Dando
Mr. Harris
The loan structure does depart from the adopted DBR Guidelines of exceeding $100,000
Borrower: Ryan and Sarah McNeill
Co-Borrower: Tom & Ruth Ann McNeill
Loan amount: $180,765
Interest rate: 3.0% simple annual interest
Repayment term: 20 years
Collateral: 1st position lien on building with additional liens in order to meet 100%
collateralization of loan - certified building appraisal pending
Second floor must be ready for occupancy within 24 months and the third floor within 36
months.
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City of Troy
City Hall
l 00 South Market Street
Troy, Ohio 45373
www.troyohio.gov
To:
Members of Downtown Loan Committee
From: Gregg Harris
RE:
Ryan & Sarah McNeill
G-H
Ryan and Sarah McNeill provided an application requesting $175,500 to purchase the property located at 9-11 E.
Main Street
Built by John Wassennan in 1880, the building known as the ''Wasserman Building" is a strong contributor to
Downtown Historic Troy and listed on the National Register of Historic Places. Previously held by a trust, the
building had been severely neglected and determined by the insurance adjuster to come down in 2007 due to
extensive damage from a roof collapse. However, with the combined eff01t of Planning Commission, the city staff
and a local private developer, the building was saved. Over the last six years, ownership has changed twice.
Through privately invested dollars the building has been stabilized with a new roof, 1st floor improvements, and has
viable businesses.
The building was recently put on the real estate market by owner Mike Arnold, who has signed a purchase
agreement with the McNeill's. Originally listed at $209,000, the agreed purchase price is at $195,000. The
McNeill's will provide cash equity of $19,500, which equals the 10% DBR equity match requirements. With the
two business tenants (Sweeney Todd Salon and HER Realtors), the building cash flows positive at $2,850 a month,
more than enough to pay for the approximate $975 monthly debt service over a 240 month period.
The DBR program funds are for eliminating the influence of blight and to encourage revitalization in Downtown
Historic Troy. As stated in their attached letter, the McNeill's have a vision for the historic building including
upper floor occupancy that will be a combination of office and residential. Additional capital investment often goes
into a building when there is a change of ownership, reducing the overall deteriorating effects downtown. The DBR
program has been a catalyst in the revitalization process, providing a critical public tool in attracting new owners to
invest in downtown.
Ryan McNeill has also requested that the 3% closing fee ($5,265) be rolled into the loan for a total of $180, 765.
I recommend the DLC recommend to City Council approval of the loan with the following terms:
Borrower: Ryan and Sarah McNeill
Co-Bon-ower: Tom & Ruth Ann McNeill
Loan ammmt: $180,765
Interest rate: 3. 0% simple annual interest
Repayment term: 20 years
Collateral: first m01tgage
This loan structure depaits from the adopted DBR Guidelines in that the loan amount exceeds $100,000. However,
the DBR loan fund currently has fill unc01mnitted balance over $600,000 and can accommodate this loan.
In order to complete the purchase before the end of November, Ryan McNeill also requests emergency legislative
action so the loan can be closed in a timely manner.
~1CNEILL
(323) 206-0998
confidence that renovations to the upper floors will result in an even greater return on our
investment.
We are seeking a loan of 90% of the purchase price of $195,000, or $175,500. We plan to
put down a down payment of $19,500 in cash, or 10% of the purchase price. Ideally, we
would love to lock in a 20-year loan at a fixed rate of 3%. We are aware that this loan has a
3% closing fee, which we would ask to be wrapped back into the loan. This would bring
the total loan to $181,350. At an estimated monthly payment of $1,006 on a 3% I 20-year
fixed, we are confident in our ability to make this loan payment from our rental income.
My parents have also agreed to be co-signers on this loan. They bring with them over 50
years of experience in real estate ownership and development in Oklahoma.
My work schedule in the coming weeks is quite busy with a lot of travel. I would ask,
therefore, that should this loan application come before a committee, I could have our
local real estate agent, Lisa Stetzel, appear on our behalf. If my work permits me to be
there in person, I certainly will.
Thank you for considering us for your loan program. We would be thrilled to contribute to
the economic development of Downtown Troy!
Sincerely yours,
;<?'- ~1~1~'/
Ryan McNeil!
CITY OF TROY
APPLICANT/BORROWER
CO-APPLICANT/CO-BORROWER
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LOAN INFORMATION
Source of Funds for Repayment $2850/mo in gross rents from Sweeney Todd Salon ($1350) and HER Realtors ($1500)
Proposed Collateral/Security for Loan _9_-1_1_E_._M_a_in_S_t._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Estimated Equity Value of Collateral/Security x$_1_95_,,_oo_o_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Source(s) of Other Funds
BUSINESS INFORMATION
NameofBr~i,~~s-------------------------------~
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Address of.Bi+s,~1).e~ s _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
City/State/Zip Code _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Fax _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Telephone _ __ __ __ _ _ _ _ __
E-Mail (optional) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ __ _ _ _ _ _ __
Corporation _ _ __
Other (state) _ _ _ _ _ _ _ _ _ _ __
Years in Operation _ _ _ _ _ _ _ _ __
Federal Tax ID _ _ _ _ _ _ _ _ _ _ _ _ __
_ _ _ Yes
_ _ _ No
Other
Equity
Fasiade Improvements
Interior Rehab of Code Violations
Interior Rehab (Non-code Violations)*
Acquisition of Real Estate
$175,500 .
$19,500 (cash).
TOTALS:
$175,500
$19,500
REAL ESTATE OWNED (principal residence and any other real estate)
Address
Market Value
Mortgage Balance
$2, 100,000
$250,000
$215,000
$155,000
Policy#
Amount of Coverage _ _ _ _ _ _ _ _ _ _ _ _ _ __
ATTACHMENTS
Please check those that are attached and/or provide an explanation or status of attachment:
Cost Estimates/Contracts
Construction Plans/Drawings
n/a
n/a
n/a
Property Deed
Lease Agreement
forthcoming
x
Other (List)
Borrower's Recent Tax Returns
PENALTY FOR FALSE OR FRAUDULENT STATEMENT: U.S.C. Title 18, Section 1001, provides:
"Whoever, in any matter withih the jurisdiction of any department or agency of the United States lmowingly and
willfully falsifies, conceals or covers up a material fact, or makes any false, fictitious or fraudulent statements or
representations, or makes or uses any.false writing or documents, knowing the same to contain any false, fictitious
or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or
both."
10/20/2014
Applicant
Date
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1012012614
Co-Applicant
Date
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