VOL. 115 | NO. 36 | Thursday, February 22, 2001
By SUE PEASE
CCDC approves new tenant loan program
By SUE PEASE
The Daily News
The Center City Development Corp. Wednesday approved a new loan program designed to assist new retailers and office tenants locating Downtown on or near Main Street.
The Main Street Tenant Loan Program would assist potential businesses in securing financing for tenant improvements including fixtures, furniture, machinery and equipment but not for inventory or working capital.
Loans may be made for up to 90 percent of project costs, with businesses going through local lending institutions. The CCDC would put up additional equity equal to 20 percent of the loan.
This program differs from others the board has developed. Traditionally, the CCDC assists property owners with development projects, whereas this program helps tenants.
The program places tenant loans at local Downtown banks such as First Tennessee and National Bank of Commerce, said Jim Street, vice president of finance for the Center City Commission. Tri-State Bank has also been approached.
"It keeps us out of the banking business," Street said.
"We are not a commercial bank and we dont want to be. So, the proper place to do this is with banks," he said.
The program is available to new retail and office tenants locating in first-floor space on Main Street between Gayoso Avenue on the south and Adams Avenue on the north, as well as on streets running east and west between Front and Second.
To be eligible, tenants must meet requirements including the terms and conditions of the bank making the loan.
Tenants must have a five-year lease and any exterior building improvements must be approved by the Design Review Board.
The program is targeting specific retailers such as clothing stores, toy stores, specialty shops, video rental and service retail.
Tenants must put up 10 percent of the loan.
Board members felt the program was a way to assist businesses that have resources, but need a helping hand.
"I think it is a good program. I think it helps people on the borderline," board member John Elkington said.
The board has $300,000 available to dedicate to the program, which could potentially support $1.5 million in loans.
In a separate matter, the board approved the assumption of a development loan for property at 387 S. Main St.
South Main Partners, whose two partners are developers Steve Bryan and Gary Garland, are negotiating to buy the building. Tenants are Rainbow Studios/Westminster Stained Glass, Scale Models Unlimited and the Hospitality Sign Co.
The property is under a tax freeze. Feb. 13, the Center City Revenue Finance Corp. approved transfer of the payment-in-lieu-of-taxes contract to South Main Partners.
The 387 S. Main building has about 6,000-square-feet of space available for lease, Garland said.
South Main Partners also owns the property at 409 S. Main which houses the Jay Etkin Gallery.
Negotiations are underway to put a restaurant in the back third of the first floor space and a law firm on the third floor, Garland said.
In other business, the board approved retaining Armstrong Allen as its legal representation with a revised agreement. The revised legal agreement includes services of a minority owned law firm, Bruce, Norris, Bass & Kimbrow PLLC.
In the revised agreement, the firm will charge a blended rate of $150 an hour instead of various billing rates depending on junior or senior level services.
The revised fee agreement and less large-scale projects coming before the CCC could create a savings of about 20 percent in legal services costs in upcoming months, said Jeff Sanford, Center City Commission president.
The CCDC received six proposals responding to its requests for qualifications.
Board members Tom Jones and Elkington passed on the motion to approve, asking to see copies of the proposals from other firms.