On February 15, 2001 the Economic Restructuring Committee presented to the public their Cooperative Interest Buydown Program (CIBP).
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Stooges Saloon
Country Insurance
Maxhn H. McCaw
Brent & Jon Bloomberg
Purpose:
The purpose of the Main Street Orion Cooperative Interest Buydown Program (CIBP) is to assist Orion area businesses and property owners in improving their commercial property to positively enhance the structures and make them more economically viable. In addition, the program is available to prospective businesses wishing to start a new business enterprise in the Orion area.
This program is made possible through the cooperation of the following four entities:
Main Street Orion
The Village of Orion
The Orion Area Chamber of Commerce
BankORION
Under this program, low interest loans are made available to qualified borrowers to renovate or improve commercial properties in the Orion area.
1. BankORION will advance loan funds to qualified borrowers under this program at below market interest rates (currently 6.0%).
2. A pool of “buydown” funds has been created through equal contributions by the Village of Orion, the Chamber of Commerce and Main Street Orion.
3. The buydown participation will vary depending on the location of the property:
| Property Location | Buydown Participants | Buydown | Net Cost to Borrower |
Within Main Street All three entities 4.5% 1.5%
Designated Area
Winthin Orion but Village & Chamber 3.0% 3.0%
outside Designated Area
Outside Orion Chamber only 1.5% 4.5%
Eligible Projects: Any commercial business property located within the Orion Area Chamber of Commerce geographic area (Orion, Osco, Andover, Lynn Center).
Use of Proceeds: Loan funds may be used for exterior and interior improvements, including, but not limited to the following: windows, doors, tuckpointing, painting, signage, awnings, fire alarm systems, interior structural remodeling, electrical, energy conservation measures, heating and cooling.
Loan funds may not be used for demolition, operating funds, inventory or machinery purchases, to refinance existing debt, or to purchase property for speculative purposes.
Maximum Amount: $25,000/project. Any request greater than $25,000 will be considered but subject to approval of the respective buydown participants.
Interest Rate:Bank cost of funds at below market interest rates (currently 6.0%) Buydown varies from 1.50% to 4.50% depending on location of the project and will be paid annually at year end as a rebate to the borrower.
Term: Interest Rate will be subsidized for 5 years. If amortization is greater than 5 years, a balloon will be used to adjust to market rates at the end of 5 years.
Maximum amortization: 15 years (greater if over $25,000)
Equity Required: 20% of project cost
Can provide in cash or equity in the building
Underwriting: Typical bank guidelines
BankORION has sole approval authority unless greater than $25,000.
Funding Limit: Subsidy available on a first come first served basis.
Borrower must maintain memberships in Orion Area Chamber of Commerce and/or Main Street Orion in order to qualify for each entity's respective subsidy.
If interested please contact:
Jim Dingman, BankORION
(309) 526-8011
The Main Street board has approved $1,500 to be contributed to the buydown pool. The Chamber has approved a dues increase to generate it's $1,500. The Village of Orion has also included $1,500 in it's current year budget.
It is hoped that this will be an ongoing budget item of each entity and will grow further.
As an example of the leverage power, $6,000 in subsidy at 4.5% leverages $135,000 in improvements for one year.
We feel that this program will be a source of great pride due to it's cooperative nature.
Communities Gather at the 10th Annual Main Street State ConferenceThe Illinois Main Street State Conference took place in Elgin on October 8-9. The community, which won four awards last year for its innovative Main Street initiatives, hosted this year's 10th anniversary celebration that included mayors, program managers and hundreds of volunteers from the 57 Illinois Main Street communities.
For the second year in a row the Main Street Orion Economic Restructuring Committee won the "Best Use of Business Incentives" award for their Cooperative Interest Buydown Program - This program provides low interest loans to qualified borrowers to renovate or improve commercial properties. The pool of "buydown" funds was created through equal contributions from the Village, Main Street and the Chamber with cooperation of the local banks. Since April, 2002 four projects have been approved with total improvements exceeding $190,000.
