[mccookgazette.com] Light Rain Fog/Mist ~ 38°F  
High: 45°F ~ Low: 37°F
Saturday, Apr. 30, 2016

Housing project seeks economic development loan

Friday, July 1, 2011

McCOOK, Nebraska -- The McCook Housing Agency was turned down in February for a $252,000 grant that they had hoped would be the final funding piece for the East Ward Village housing project. When asked for an update on the project in May, Executive Director Rebecca Dutcher told the Gazette that, "financing had gotten a little more complicated with the federal budgets being cut." Financing of the project now appears to depend on the City of McCook, with council members to consider approval of an economic development revolving loan, Tuesday evening, 7:30 p.m., during their semi-monthly meeting at Memorial Auditorium.

The limited liability company, East Ward Village LLC, is asking for a two percent interest rate, 15 year, unsecured loan in the amount of $105,000. If approved, the loan would fill the remaining financing gap for the $3,902,094 project.

The loan application lists $275,000 as land/building costs and $3,627,094 as construction costs.

The Economic Development Plan guidelines for operation of the revolving loan fund state that terms of the loan shall not exceed 10 years for capital assets and seven years for all other assets. The 15 year loan raises further questions as narrative, included with its application to council members, hails it as a project that would improve the retention of youth and young adults in the area. The East Ward Village Project will provide for 27 units at a cost of $144,522 each, primarily targeting seniors, age 55 and over, that are capable of living independently. Dutcher told the Gazette in September that 80 percent of the tenants must be over 55 and all must meet income guidelines.

MEDC Executive Director Rex Nelson addressed questions pertaining to the length of the loan in an email to the Gazette Friday morning. "The loan committee approved this as a 15 year loan because the intent of the program guidelines was to define loans to job creating businesses. Other approved activities such as infrastructure or housing would not necessarily even be structured as a loan. For example we might pay the city to put sewer and streets in for a new business. That distinction is not well defined in the plan however, so in going over this with Nate [city attorney], Lea Ann [city clerk] and Kyle [public works director], we all agreed that it would be best to structure this to conform to the loan provisions in the plan. The actual proposal to the council then is for a 10 year loan with a balloon payment in year 10," said Nelson. Nelson also said that there was still some uncertainty as to whether the change would work for the developer.

Nelson told the City of McCook Economic Development Program Loan Committee, during a meeting in May, that a chronic housing shortage is approaching a crisis level for the community. His report claims the shortages are beginning to impact businesses ability to hire new employees, "we now have reports of folks with jobs who were unable to find housing and declined to move to McCook. At the MEDC Housing office, we are seeing cases of young people who have landed jobs but are struggling to find a place to live."

Nelson's report said that elderly who move into the East Ward apartments will put single family housing units on the market. "The MEDC board believes that even if this loan were not to be repaid, the investment of $105,000 in order to facilitate a $3.8 million project is not only acceptable but important for the business community at this time. There is no other way that as a community we could stimulate 27 new housing units with such a modest investment," said Nelson.

Background information regarding the loan request item, in the city council packet for Tuesday's meeting, stated that the November 13, 2007, ballot question addressing what may be covered through the MEDC revolving loan, included language which clearly allows for projects that would improve the retention of youth and young adults.

The loan committee, Kent Craw, Jason Grigg, Kent Kilpatrick, Dale Dueland, Doug Skiles and Rex Nelson, approved the loan during the May meeting. In addition to the previously mentioned terms of the loan, the loan committee approval required annual payment of 50 percent of residual cash flow, after all other expenses are met; as well as payment in full if USDA 538 funds became available prior to conversion to permanent financing.

Other items on the consent and regular agenda;

* The 2011-12 preliminary annual budget will be presented and council members will conduct their first of three budget workshop meetings.

* Councilors will be asked to approve the plans and specifications for energy efficiency upgrades at the city street shop. The city of McCook received a $20,326 grant from the Nebraska Energy Office, as part of the stimulus funds that were distributed. The grant is to be used to upgrade lighting, windows and insulation at the shop and requires a 20 percent or $5,000 match from the city, which city staff has already budgeted for.

* Council members will consider a change order that will authorize a $1,891 cost increase to the waste water treatment plant primary clarifier rehab project. The total project cost is now at $99,551, with a budgeted amount of $100,000.

* Changes to the encroachment agreement between the city and El Paso Remediation Company will be considered for approval. The amendment focuses on changing the licensee from Coastal Mart, Inc., to El Paso Remediation Company.

* City staff has recommended that a bid received for water system improvements on C Street, between East 13th and Airport road, be rejected and re-bid at a later date. Only one bid was received before deadline and it came in more than $18,000 over the estimated amount of the project.

* McCormick excavating and paving has been recommended by city staff to receive the bid for the East O street excavating and paving project, in the amount of $154,510.

* The West 10th Street drainage improvement project will be recommended to be awarded to BSB Construction, in the amount of $56,415.

* The Coppermill restaurant has applied for a special liquor license for a Aug. 6, 2011, wedding reception at the Red Willow County Fairgrounds community building.

* The Fraternal Order of Eagles #2769 has applied for a special liquor license for a dance, fund raiser and beer garden, Aug. 29, 2011, at 805 East B Street.

Fact Check
See inaccurate information in this story?

Respond to this story

Posting a comment requires free registration:

Related subjects