ACTION REQUESTED:
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Communication from the City Manager with a Request to APPROVE an AMENDMENT to the REVOLVING LOAN FUND with CPO GROUP HOLDINGS.
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BACKGROUND: The City's Revolving Loan Fund (RLF) was established in 1988. The RLF was established with $500,000 from an EDA grant and a $269,000 match from the City. Since inception, 43 loans have been issued, totaling over $3 million. The total current RLF balance available for lending as of 12/31/14 is $886,892.21.
In 2010, City Council approved a loan in the amount of $150,000 to CPO Group Holdings. The repayments terms of the loan included a repayment schedule based on a 10 year amortization at 4% interest with a five year balloon payment of $82,462.75 due on June 1, 2015. The City's loan was a part of a $2.7 million project to help the company expand and move into its current location at 741 W. Main Street. The City has secured interest, by a second position, in the properties at 741 W. Main Street and 712 W Russell St, as well as a personal guarantee from Amit Bhanti and Donald Goertzen (business owners).
At the time of the loan, CPO employed nine people in their Peoria office. Today, CPO employs 25 people in their Peoria office and hopes to hire 45 more employees by 2019. To help in the ongoing company expansion, CPO has requested to extend its payment period another five years while making the same monthly payments based on the original 10 year amortization schedule. The request has been reviewed by the City's RLF loan committee.
Peoria County also made a $150,000 loan to CPO in 2010 and is working to extend the loan.
FINANCIAL IMPACT: The balloon payment of $82,462.75 due now will be financed over the next five years. Extending the loan places CPO in a better position to grow and hire additional employees.
NEIGHBORHOOD CONCERNS: None
IMPACT IF APPROVED: The City will amend the loan and assist an existing business in their future growth. The outstanding bala...
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