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µ CITY OF PETALUMA ' CALIFORNIA,
Petaluma Community D.evelo.pment C ®fln m ssio.n
AGENDA BILL OCT 1 2004 o
enda�, Titt'c: Discussion and Action Adopting a Resolution
Meeting Date:
uthorizing 1Vlodif cations to ..the' Storefront 'Improvement Loan
October l 8, 2004
Program and. Authorizing the'Executive Director.to Execute a Loan;
A greernent and Related Documents with Stephen A. Lind, et al, and.
Me eting Time E 3:00 PM
to''" provide a loan in . the amount of up to $200;000 ,for thew,
El 7:00 PM
I
Restoration and Historic Preservation of -119 Petaluma.Blvd. North
Category (check one) ❑ Consent Calendar' E] Public Hearing New' Business
' Bsiness I " ❑ Presentation'
Unfinishedu
. " Department :
Director
Contact Perso'w
Phone Number
ED & Redevelopment
Paul Marangella =^�-
Paul Marangella
778- 458:1
Cost of Proposal : $200,000
Account.N 5510- P201010
Name of Fund: Central Business
Amount Budgeted $200,000_ ..
District Project Area Fund (5 510)
Attachments to Agenda Packet4iem
T -. Reso'l'ution Authorizing Modifications to the Storefront Improvement. Loan Program and
Authorizing the Executive Director to Execute a Loan Agreement and related documents .
2. Loan Agreement
3. Historic Building Photos
Summary Statement
Three years ago, as part of the Petaluma Community Development Commission's: (PCDC) "Five -Year
Implementation Plan," the Storefront Improvement Loan Program was initiated. Under the program,
perty owners in the Central 'Business District (CBD) could borrow up to $25',000, at low interest, in
der to make improvements to their storefronts. ts. While the p rogram has been repeatedly marketed to the
n
property owners, none have chose''to participate to. date.
,Recently, at the suggestion of representatives of Heritage, Homes, City staff the owner of 119
Petaluma Blvd. North, Stephen Lind, and asked about his interest 'in removing the stucco _face of the
building nd restorm c e of the; buildin beneath it.; In response, Mr. Lind expressed
g g ° „the original- histon
the 'costs of Makin :'this m rov
his sincere interest and he began explor g g p ment. After' a preliminary
' �n a
survey, he determined .that the cost of historic restoration could• range from $ $150,0.00, depending
upon the damage found underneath the stucco face ,of the building. Mr. Lind has requested a loan in an
amount up to $200,000. Staff and Mt. Lind have :agreed' 'to a loan structure pursuant to which (i) the
Agency would :fund the'firs,t $100;000 of'restoration work; (ii) Mt. Lind wo.u.ld privately fund, the next
$5.0,000, and (iii) to the extent that rest costs exceed $150,000; the Agency would loan additional
funds of up to :$100,000. The total Agency loan would be in the maximum amount of $200,000. As the
Pr ogram,
_ e' from the existing Storefront Improvement Loan the PCDC is
terms of ,the requested „.loan devrat
required to authorize such , .,a loan.
I it
Therefore the purpose ! �o f this agenda item is to consider �a modification to the .Storefront Improvement
Loan Program in order to increase_ the.maximum loan�amount, extend” the oan term and,reduce the interest
rate, and -to authorize a storefront improvement loan of' up to,, $200,000 ;for the first -time historic renovation
and preservation of 11'9 Petaluma Blvd. North.
commended`City Council Act'ionLSugested Motion
t a resolution authorizing modifications to, the Storefront Improvement Loan Program and authorizing
Executive Director..to execute a Loan Agreement and related .documents with Stephen A. Lind,, et al.
II
eviewed b,Y Finance Direct'or.:
Reviewed by City Attorney
Date:”
A roved fit Mana 'er:
Date:
ate -
Today's' ate '
Revision # and-Date Revised;
File Code:
�,�Se terriber 22, 20:04 ,
p
CITY OF PETALUMA, CALIFORNIA
Petaluma Petaluma Community D.evelopment Corninission
October 18, 2004.
AGENDA REPORT
FOR
DISCUSSION'AN I. ACTION ADOPTING A RESOLUTION AUTHORIZING
MODIFICATIONS TO THE STOREFRONT IMPROVEMENT LOAN PROGRAM AND
AUTHORIZING THE EXECUTIVE; DIRECTOR TO EXECUTE A'LOAN AGREEMENT AND
RELATED DOCUMENTS WITH STEPHEN'A. LIND AL, AND TO PROVIDE A LOAN FOR
THE RESTORATION AND HISTORIC PRESERVATION' OF 119 PETALUMA BLVD. NORTH
1 ' EXECUTIVE SUMMARY
Community p ent Commission's (PCDC) "Five -Year
Im ,"
Th plementat on PI an the Storefront Improvement t Loan Program. was initiated. Under the program,
property owners in the Central Business District (CBD) could borrow up to $25,000, at low interest, in
order to make improvements -to "their storefronts. 'While the pfpgram'has been enthusiastically,marketed
to the property owners, hone have chosen to participate to date.
Recently, at the suggestion of representatives of Heritage Homes, City staff approached the owner of
119 Petaluma Blvd. North, Stephen.,Lmd, and asked about his interest in removing the stucco face of the
building and restoring the original `!historic face of the building, beneath it: In response, Mr. Lind
expressed his sincere interest` and lie began exploring the costs of':making this improvement. After a
preliminary survey, he determined that the cost of restoration could range from $100,000 4150,000,
depending upon the damage, found underneath the stucco face of the'building. Mr. Lind has requested a
loan of up to $200,000 pursuant to the following schedule: (i) the Agency would fund the first $100,000
of restoration work, (iii) Mr. _Lind would privately fund the `next $50,000, and (iii) to the extent that
restoration costs exceed $150,000, the "Agency would loan additional: funds of up to $100,000. The total
Agency loan would be in the ,maximum amount of $200,000. As the terms of the requested loan .
deviate from the existing Storefront Improvement. Loan Program, the PCDC is required to authorize
such a loan.
Therefore the purpose of this agenda item is to consider a:modification "to the; Storefront. Improvement
Loan Program in order to increase the maximum. loan amount, extend the loan term and reduce the
interest Blvd 1 an of up to $200,000 for the historic first -time renovation and
rate, and " to au thonz
preservation of 1 l9 Petal,uma
2. BACKGROUND;
The current Storefront lmprovement Loan Program contains the following elements:
e Property - owners in the CBD are eligible for storefront improvement loans up'to $25
® The term of'a `loan is five years. Loans are paid quarterly, in twenty equal installments.
® Applicants.rnusi have a goo, od credit history. Loans are unsecured.
® The interest rate of the loan is 4 %.
The following riiodif cations
to the 'S'torefront Improvement Loan. Program are ..recommended. for
properties that were built before 1904 where a property owner is'uhdeftaking si pant reconstruction
to restorei the historic edifice for °the, first - time'
o Property owners are eligible for. storefront improvement loans up to $200,000.
o The teen of the loan is twenty years, after which it is payable in full.
o Applicants.musf have a good credit history.
o The loan is interest free..
o All work is performed, at prevailing wage rates.
o If the property 'is sold during the'term .of "t_he loan, the entire ;loan is due; on sale.
o Repayment o the loan is secured'by a deed of trust on the property.
The proposed modification to the Storefront Improvement Loan Program r..ecognizes' that, while it is in
the PCDC s interest to restore the heritage g , y economically feasible
' to e of downtown buildin s it ma not be
for ro ert owners to do 'so• Typically, building, is
p p y' ` ypicall ; the, value, of a downtown build based on -the rent per
square foot: Rent is not significantly impacted by the aesthetics of the building', edifice. Therefore, there
is little financial incentive for owners of`historic buildings to undertake expensive and risky storefront
improvements. Wlthout assistance from the PCDC, it is; unlikely that the edifice to 119 Petaluma Blvd.
North would be- The Agency is truly fortunate that Mr. Lind is willing to participate with it and
absorb a significant poi`tion of the cost.
3, ALTERNATIVES
A alternative, t P ,P g Under�tl. Authorize'the Pro qwd Aft endment to `the Storefront Improvement Loan Pro ram:
he PCDC would authorize the Executive Director to modif the Storefront lmproveme9
Loan Program;in order. to increase the maximum loan amount, extend thd'term of loan and reduce
the interest :rate, , and would authorize the execution of `a loan agreement and related documents with
Stephen A. 'Lind and the provision of a loan in the amount of up to $200;000 for the first -time
restoration and historic preservation of 119 Petaluma Blvd. North.
B; Decline to Modify the Storefront Improvement Loan Frogram: • Under this, alternative, the
PCDC would maintain its current loan program and decline to loan funds in excess of $25,000.
4. FINANCIAL- IMPACTS
The FY 2004 -05 PCDC Budget: includes an appropriation of $200,000 for the storefront :improvement
loan program. Funding, a Than for the restoration and historic preservation of 119 Petaluma Blvd. North
for $200,000 would usethe entire appropriation for the program for this fiscal year.
5. CONCLUSION
The .PCDC's "Five -Year Implementation ;Plan" established the Storefront. Improvement Loan Program
as a means of assisting downtown' property- owners with the rehabilitation and - restoration of storefronts.
The property -owner of 119° Petaluma Blvd. North is .requesting PCDC financial assistance in
undertaking a significant restoration to the edifice of the building. PCDC authorization is required for
the transaction. Approval, of the assistance would eliminate an unattractive building edifice and help
restore the City's rich downtown heritage.
•
OUTCOMES OR PERF,O.RMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESS OR COMPLETION:
WithjPCD:C financial ass�stanee, the edif ce to 119 Petaluma -Blud. `North, will be restored by June. 30,
12005:
7. , E' COMMUNDATION
It is recommended that the PCDC adopt the attached resolution:
A. Authorizing'the following modifications `to the storefront improvement loan program for
properties in the Central ,Business District that were built'before 1904 and where a property -
owner is undertaking a significant - estoration of the historic edifice for the first -time:
o Property owners are eligible for storefront improverent loans up to $200,000.
o The term of the loans twenty`years, after which'it payable in full.
o Applicants must have a good credit history.,
o The loan `i�s interest free.
o All work i's performed atprevailirig wage rates.
o If the prop'erty is 'sold during the; term of the loan, the entire loan is due on sale.
o Repayment ofihe,loan is secured b. a de '
y ed of trust on the property.
B. Authorizing the Executive Director to a Loan Agreement and related documents
hen
with Ste A., Linde h et ursu
p a] , pursu to which PC would provide a loan in the amount of up
r+ ,
to $200,000 for the purpose of the first time.restoration and historic preservation of the edifice to
119 Petaluma Blvd. North.
•