first tennessee development district: downtown johnson city redevelopment loan program

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First Tennessee First Tennessee Development District Development District Downtown Johnson City Downtown Johnson City Redevelopment Loan Redevelopment Loan Program Program

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Page 1: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

First Tennessee First Tennessee Development District Development District

Downtown Johnson City Downtown Johnson City Redevelopment Loan Redevelopment Loan

ProgramProgram

Page 2: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Downtown Johnson CityDowntown Johnson City

Page 3: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

HistoryHistory• In 2005, the Johnson City Development In 2005, the Johnson City Development

Authority & area banks were looking for Authority & area banks were looking for a way to improve the downtown district.a way to improve the downtown district.

• District suffering from neglect (picture)District suffering from neglect (picture)• The idea of a loan program was The idea of a loan program was

proposed along with other measuresproposed along with other measures• The banks were willing to contribute to a The banks were willing to contribute to a

loan fund, but who would manage the loan fund, but who would manage the fund?fund?

Page 5: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

History History • SBDC recommended the First SBDC recommended the First

Tennessee Development District Tennessee Development District (FTDD)(FTDD)

• District had 15 years experience in District had 15 years experience in operating RLF and IRP loan programsoperating RLF and IRP loan programs

• Banks & FTDD met to define the loan Banks & FTDD met to define the loan programprogram

• Failed effort a few years ago with Failed effort a few years ago with another entity led to skepticismanother entity led to skepticism

Page 6: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

ProgramProgram• 8 Banks made $60,000 loans to 8 Banks made $60,000 loans to

FTDD for 10 years at 0%. Total FTDD for 10 years at 0%. Total Fund $480,000. Fund $480,000.

• Each bank owns a share of the Each bank owns a share of the fund and risk not on FTDD fund and risk not on FTDD

• Several banks considered it a CRA Several banks considered it a CRA investmentinvestment

Page 7: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

ProgramProgram• Loans of up to $50,000 for fixed assetsLoans of up to $50,000 for fixed assets• Current interest rate 4% Current interest rate 4% • Loans can be a 2Loans can be a 2ndnd position loan to a position loan to a

participating bankparticipating bank• Or a direct loan to a business that has Or a direct loan to a business that has

an account at 1 of the 8 banksan account at 1 of the 8 banks• Direct loan component added at Direct loan component added at

request of downtown businessesrequest of downtown businesses

Page 8: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Questions FacedQuestions Faced• Is any business eligible? YesIs any business eligible? Yes• Are non-profit businesses eligible? Are non-profit businesses eligible?

YesYes• How to address tough building How to address tough building

codes?codes?• Is working capital eligible? NoIs working capital eligible? No

Page 9: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Loan #1Loan #1• Building purchase and renovationBuilding purchase and renovation• Total cost $180,000Total cost $180,000• Bank Loan - $137,000Bank Loan - $137,000• FTDD Loan - $25,000FTDD Loan - $25,000• Business Equity - $18,000Business Equity - $18,000

Page 10: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Loan #2Loan #2• Business wants to put on a new Business wants to put on a new

roofroof• Total cost $28,000Total cost $28,000• FTDD Loan - $25,000FTDD Loan - $25,000• Business Equity - $3,000Business Equity - $3,000• Business has an account at 1 of 8 Business has an account at 1 of 8

banksbanks

Page 11: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Program TodayProgram Today• 32 loans totaling $751,53532 loans totaling $751,535• Businesses added 112 jobsBusinesses added 112 jobs• Loan written off - $7,429 (covered by Loan written off - $7,429 (covered by

loan loss reserve)loan loss reserve)• 22ndnd loan program set up in Greeneville loan program set up in Greeneville• Program renewed by banks for Program renewed by banks for

another ten yearsanother ten years

Page 12: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

London’s LoftLondon’s Loft

Page 13: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Mansy Mansy BuildingBuilding

11stst Floor – Floor – German German

RestaurantRestaurant22ndnd Floor – Floor –

Shared Office Shared Office SpaceSpace

33rdrd Floor - Condo Floor - Condo

Page 14: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Fountain Fountain Square Square BuildingBuildingThe Bee The Bee

HiveHive

Page 15: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Energy FitnessEnergy Fitness

Page 16: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Downtown TodayDowntown Today• Downtown thriving with several Downtown thriving with several

major investmentsmajor investments• Downtown becoming a first choiceDowntown becoming a first choice• City is completing major flood City is completing major flood

control/linear park projectcontrol/linear park project• City built open air farmers marketCity built open air farmers market• Façade Grant Program in placeFaçade Grant Program in place

Page 17: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Founders ParkFounders Park

Page 18: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Yee Haw Brewing Yee Haw Brewing

Page 19: First Tennessee Development District:  Downtown Johnson City Redevelopment Loan Program

Farmers Market Farmers Market