Council OKs loan program for commercial renovations

Published 10:32 am Wednesday, August 16, 2017

Beginning in the next 60 to 90 days, business owners in Franklin will have the opportunity to apply for a low-interest loan from the city to fund renovations to their storefronts. City Council voted unanimously during its meeting on Monday to approve a commercial rehabilitation loan program, first proposed this past February by Amanda Jarratt, president and CEO of Franklin-Southampton Economic Development Inc., on behalf of Franklin’s Business Friendly Committee.

The loan program would use $146,326.88 in funds categorized as program income from previous grant-funded programs, which had been sitting unused for a number of years in a bank account separate from council’s general fund, and distribute them in the form of low-interest loans to eligible businesses. City Manager R. Randy Martin explained that because the funds are income from previous grant programs, the law requires that they only be used for similar purposes. The proposed low-interest loan program is one such purpose that would qualify.

“In other words, the city cannot utilize these funds to supplant operating budget activities for the city for example; I certainly support the recommendation and feel strongly that the city needs to reinvest these funds in the community to incent property owners to upgrade their properties,” Martin said in a memo to council.

The maximum loan amount under the program would be capped at $35,000, with a $5,000 minimum loan. Eligibility requirements for business owners specify that the property to be renovated must be located within the corporate limits of the city of Franklin; that the improvements to be made with the loan proceeds are limited to the cost for the restoration, renovation, rehabilitation or preservation of commercial buildings and structures; that only new loan applications will be accepted, and no refinancing of an earlier low-interest loan for building improvements will be allowed under the program; that the applicant will have no current delinquent payments or have had any delinquent payments from a previous low-interest loan for one year prior to the application; and that the applicant be in good standing with the city of Franklin with all real estate taxes, personal property taxes, business license fees, business property taxes, sales taxes, meals taxes and utility accounts with the city paid and current. It further requires that no nuisance liens be attached to the property to be renovated.

If an owner is accepted into the program, he or she will receive the funds with a fixed interest rate of 1 percent above the existing prime rate at the time the loan is approved. The repayment term may vary up to a maximum of seven years and repayment would be in equal monthly installments of principal and interest commencing on the first month after the project has been completed. Loan applications will be approved by a committee appointed by city council, consisting of a representatives of the city, FSEDI, the Downtown Franklin Association and the Franklin-Southampton Area Chamber of Commerce.

In other business, the council voted unanimously to appropriate $10,000 in donated funds from Franklin-Southampton Charities to be distributed to the Franklin Fire Department and Hunterdale Volunteer Fire Department, each of which will receive $5,000.

The council also received an update from Martin on the city’s most recent comprehensive annual financial report (CAFR) and an update from City Attorney H. Taylor Williams IV on the status of the Hayden Village project.

Martin said that as a result of the city’s most recent CAFR, it has once again received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association. The Certificate of Achievement is the highest form of recognition in governmental accounting. This is the fifth consecutive year in which Franklin’s accounting staff has received this award.

Williams said that in late July, the city finally closed on a deal that transferred ownership of the former Hayden High School building to Hayden Village Associates LLC. Senior Services of Southeastern Virginia, which has ownership interest in the LLC, will now be able to begin the process of converting the former high school into a multi-use facility for senior citizens, to include 27 senior housing units. The building sold for $95,000.

The councilman also requested the meeting’s agenda be amended to include a declaration of his potential conflict of interest in the Madison Street program, given that he had recently filed to have his own home renovated via the initiative. He said he was making public disclosure of his potential conflict on the advice of City Attorney Williams, though he did not personally believe that a conflict existed since he did not have any voting privileges on who is and is not approved for the program. His disclosure will remain on file for five years.

One of the final items discussed that night was another update on the city’s ongoing issues with its electric utility billing. Martin said that additional software training has been scheduled and that the city is working to fill an unexpected vacancy in the billing department.

“We’re working with our billing company — which is who we send our info to — to cut down on turnaround time,” he said. “I’m pleased with our progress but not pleased that we haven’t met our goal.”