City Council Regular Meeting


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CL-2547 New Business   Item #: D.       
Meeting Date: 06/15/2021  
Subject:    Consideration of a Moral Obligation for Loan Renewal--1350 Barker Road
From: Corrie Bobe

Business Meeting:     06/15/2021
This moral obligation will provide for an extension of an existing action by City Council to provide for the Industrial Development Authority to borrow funds from American National Bank & Trust Company to purchase 1350 Barker Road property and building.  The amount of the loan will $956,000, and it is for a three-year term with an amortization schedule of 15 years.  The first six months of the term will be interest only to allow the Office of Economic Development to market the property aggressively prior to incurring principal payment on the loan.
The IDA purchased 1350 Barker Road property from the former business, U. S. Green Energy, at the time that company filed bankruptcy and closed all operations.  The property has a relatively new building, which is in excellent condition and consists of 27,000 square feet of finished manufacturing space with associated office and service area, also finished.  The property itself covers 59.12 acres in Cane Creek Centre.  This request for a moral obligation is to provide for a continuation of the loan agreement with American National Bank, and with this renewal, there will be a twenty-five basis point reduction in interest rate resulting in a savings to the City and the IDA.  Danville has a very limited number of suitable buildings for a manufacturing operation, and this property provides some needed inventory.  The accompanying acreage will allow for significant expansion of a facility on the site.
Staff recommends that Council approves a moral obligation as prepared by the City Attorney and the attorney representing American National Bank and Trust Co.

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