Section 108 - 2006 Economic Development Projects - Colorado

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Business Assistance Loan Pool
Colorado Springs, CO
Section 108 Guaranteed Loan- $14,000,000

The City of Colorado Springs and the Economic Development Division of the City of Colorado Springs will establish a business loan fund that will assist existing businesses and attract new businesses to distressed areas of the City of Colorado Springs. Loans will also be provided to non-profit service providers and public housing entities. The Loan Fund will be open for any and all distressed areas within the City of Colorado Springs, but the focus will primarily be on three separate districts of the City, two of which are State-designated urban renewal areas.

The Community Development Block Grant (CDBG) national objective for the City’s use of its guaranteed loan proceeds is to benefit low-moderate income persons through job creation and the elimination of slums or blight. The Loan Fund will cause the creation of approximately 400 new jobs as the City will require that borrowers create one full-time job per $35,000 borrowed.

The City will repay its Section 108 Guaranteed Loan over a twenty-year period, utilizing the repayments of its borrowers. To secure the repayment of its guaranteed loan, the City will pledge its interest in third party loans secured by first lien positions on real property, personal guarantees, equipment, accounts receivable, and/or inventory. Also, the City pledges its CDBG funds.

Taxi Redevelopment Project
Denver, CO
Section 108 Guaranteed Loan- $6,000,000

The City of Denver will provide financing assistance to the Zeppelin Development, Limited Liability Corporation (LLC), for the construction of a 550-foot long, three story structure that will have 60,000 square feet of commercial space on the first and second floors and approximately 34,000 square feet of residential space containing 29 affordable loft condominium units on the third floor. The site is a 9-acre parcel situated on the South Platte River and was formerly an industrial site with soil, groundwater, asbestos and lead based paint contamination, and underground storage tanks. The remediation of the site may necessitate the installation of a methane venting system.

The City will use a $2,000,000 Brownfields Economic Development Initiative (BEDI) grant in conjunction with its Section 108 Guaranteed Loan. The total project cost is $17,433,850 of which the developer, Zeppelin Development, LLC, has bank financing commitments of approximately $9,000,000. The City will loan the Section 108 funds to Zeppelin Development, LLC, to finance a portion of the commercial construction costs.

The Community Development Block Grant (CDBG) national objective for the City’s use of its guaranteed loan proceeds is to benefit low-moderate income persons through job creation. The project will create an estimated 200 new full-time jobs.

The City plans on repaying the Section 108 Guaranteed Loan over a three year period, paying interest only for the first two years. It plans on repaying this interest using some of the BEDI grant. The City will also use revenue generated from the sale of the condominiums to repay the loan. To secure repayment, the City has pledged its interest in its third party loan to Zeppelin Development, LLC, secured by a second deed of trust on the project property, and its CDBG funds.