Springfield on Monday approved a loan to fund the redevelopment of a parking lot next to the downtown Buick former dealership that officials say would add much-needed housing options.
The board of directors of the Springfield Economic Development Agency unanimously approved a move to loan BlueMcKenzie LLC up to $ 2 million. Blue McKenzie is a combination of the Scherer family, who have owned the trading house for decades, and Portland-based developer Northwest Sustainable Properties.
The company will spend up to $ 400,000 on the property purchase and up to $ 1.6 million on the pre-development of an eight-story building to be built on the A-Street property between the former dealership and the post office.
The project envisages commercial space of 5,000 square meters on the ground floor, which is surmounted by seven floors of living space in line with the market – an estimated 85 units.
Read more about the project: * For subscribers * Springfield can borrow up to $ 10 million to redesign the downtown parking lot
That would meet a huge need in the community, said Courtney Griesel, the city’s director of economic development.
“Our market urgently needs housing, and it may still be for some time,” said Griesel.
The development team has been working on the project for more than two years, Robert Scherer told the board in a public statement.
After the dealership closed in 2019, the family decided to do something with the property and the surrounding area, both as an investment and as a way to give something back to the community.
“We plan for it to be successful, and if it does, I think it will bring more benefit to the city,” he said.
Under the terms of the loan approved on Monday, Blue McKenzie would receive the loan of up to $ 2 million at 0% interest and a 1% loan fee.
The loan is due after 18 months, although it is forgivable if “both parties determine that building the development is not financially feasible”.
The company must repay the pre-development loan to receive a $ 10 million loan for construction. The terms also stipulate that the city and the development team will work to agree on the main terms of the second loan within the next six months.
For the city there is a “somewhat minimal” risk, said Griesel. If the city grants the loan or the developer is otherwise in default, the city takes ownership of the property and receives all pre-development contracts and work results.
She added that while the proposed loans would limit the business development agency’s ability to borrow large downtown loans, there will be a big boost in 2023 as the project will be taxable once construction is completed.
Contact the city council’s watchdogs, Megan Banta, at [email protected] Follow her on Twitter @ MeganBanta_1.