PLATTEVILLE — One month after rejecting a loan rollover request for the Bayley Building, the Platteville Common Council unanimously approved rolling over the building’s loan Aug. 14.
The council voted to borrow $291,000 on behalf of the city’s Downtown Redevelopment Authority to push the balloon payment back to August 2015, so the Bayley Group, LLC, the building’s owner, can refinance the loan in three years with a commercial lender.
The balloon payment that was due Aug. 1 was extended to Nov. 1, according to city records.
The loan is being made with Livingston State Bank at 1.75 percent interest. The vote in July was on rolling over the current loan at 3.3 percent interest.
Community Development and Planning Director Joe Carroll said the owners were unable to refinance the building due to the “banking climate.”
The Bayley Building, at 85 E. Main St., houses Change of Seasons on the first floor and apartments on the second floor.
The council loaned the Bayley Group money for the renovation in 2007 under the Downtown Redevelopment Authority’s Underutilized Property Improvement Program. The Bayley Group purchased the building in 2006.
Since it was purchased and renovated, the building’s assessed valuation has increased from $137,900 to $598,400, and its estimated fair-market value has increased from $170,600 to $592,500, according to city records. The building also received an award from the Wisconsin Main Street Program in 2010.
Three of the building’s owners spoke at the meeting.
“It takes a lot of money; that’s why there’s an RDA,” said Mark Ihm of Platteville. “When you let a building go for 40 years no bank would touch it without a public partnership. What the city got out of it was an award-winning project.”
“Having a vibrant downtown where buildings are fully utilized is in the always in the best interest of the community,” said Amy Charles of Shullsburg.
“We have added to the tax base of the city as well,” said Charles’ husband, Adam, noting that taxes on the building have increased from $3,000 to $14,000.
On the other hand, said Rich Christensen, 10 S. Third St. #4, “I think the Bayley Building loan has turned out to be a bad loan. My question was why wasn’t that Aug. 1 payment made by the Bayley Group? … I’m afraid that $290,000 of taxpayer dollars are being put at risk. Where will this be in three years?”
To that, at-large Ald. Steve Becker said, “There’s equity in there. Are we going to lose any money on this? No, we’re not going to lose any money on this.”
Common Council President Mike Dalecki noted the building’s 79-percent loan-to-value ratio and said, “If they did default, it’s fully rented.”
The council also reapproved a loan to State Theaters, Inc. for digital projection equipment for the Avalon Theater downtown.
The council voted July 10 to borrow $175,000 from Mound City Bank on behalf of the RDA at 1.9 percent interest over seven years. However, the terms of the loan prohibited loans for “any trade or business carried on by any person other than a governmental unit.”
The council voted Aug. 14 to reject the Mound City loan and accept the next lowest bid, from American Bank at 2.2 percent interest over seven years.
District 4 Ald. Ken Kilian voted against the loan.