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New Business   Item #: C.
Industrial Development Authority Moral Obligation for Maintenance and Repairs Financing
Business Meeting: 01/19/2021
On November 10, 2020, the Industrial Development Authority of Danville, VA, (IDA) approved financing terms from Movement Bank for the needed maintenance and repairs of the property located at 816 Monument Street, Danville, Virginia. The warehouse is currently leased by Southern States and Belk, Inc. d/b/a United Electronic Services, Inc. (UES). The warehouse has approximately 77,500 square feet of space. Southern States leases approximately 19,728 square feet of the available space, and UES currently leases approximately 46,455 square feet of space. Movement Bank will provide financing for this project of up to $470,000. Movement Bank has requested a moral obligation from the City.
The IDA purchased the property located at 816 Monument Street in July 2017. The warehouse has over 77,500 square foot of available leased space and is currently occupied by Southern States and United Electronic Service Co., a division of Belk, Inc. Southern States leases approximately 19,798 sq. ft to store its inventory while UES is leasing 46,455 of the available space. Staff, with the assistance of a local contractor, have identified a number of deferred maintenance items that need to be repaired or replaced. The IDA has engaged the services of Blair Construction Co. for a contract budget of $524,000 to make the necessary repairs. The Scope of Work for this project includes installing a new roof, repairing and replacing any damaged gutters, replace worn and or damaged ceiling tiles and flooring along with minor repairs to the restrooms and common areas of the warehouse. Movement Bank has agreed to provide financing at 90% of the project cost ($470,000) for up to 20 years. The bank is requesting a moral obligation from the City as part of its commitment to lend.
Staff recommends that City Council approve the attached "Moral Obligation Agreement of City of Danville” and the Resolution authorizing the City Manager to enter into such an agreement with Movement Bank in the amount of $470,000.
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