Local lenders are teaming up to create a pool of loan money for urban development, with an emphasis on downtown Kokomo.
Kokomo Downtown Association director John Wiles said four Kokomo banks will capitalize a $2 million loan fund “for commercial real estate acquisitions with substantial renovations.”
The city’s Urban Enterprise Zone — a moderate- to low-income area surrounding and including the downtown — will be the target area for the loans, which will be made available to qualified borrowers at market rates.
STAR Financial Bank, Community First Bank, Security Federal Savings Bank and First Farmers Bank and Trust will offer loans up to a maximum loan of $500,000, with a minimum loan of $250,000.
“The downtown is the urban and historical heart of Kokomo,” Kokomo Mayor Greg Goodnight said in a statement issued Thursday. “Revitalizing downtown will result in new tax dollars for our community and create prosperity and foster a climate of progress that is favorable to attracting and retaining businesses.”
The loan pool is part of an ongoing downtown revitalization effort between the city of Kokomo and the Greater Kokomo Economic Development Alliance, which includes the Kokomo Downtown Association.
“Last year, the organized committees began developing a Downtown Kokomo Re-development Plan. The plan’s focus is on infrastructure, signage, public and private incentives, an arts plaza, beautification and Riverfront District,” Wiles wrote in a statement.
As part of the public-private effort, the city has established a Riverfront Development District along the Wildcat Creek, offering specific incentives such as special liquor licenses.
In addition, the city is using Economic Development Income Tax revenue to offer other incentives, including a revolving loan fund, façade improvement loans, and forgivable marketing loans.
“This is an excellent example of the private and public sectors working together to create new tax revenue that will benefit our whole community,” said Jeb Conrad, president and CEO of the Greater Kokomo Economic Development Alliance.
The city’s Department of Development will screen applicants for the new loan pool, looking at whether business plans are an “appropriate fit of general development goals of the downtown market area,” Wiles wrote.
Potential borrowers will then be sent to the bank group for review and credit underwriting. Interior and exterior renovations may be structured under separate loans.
City officials said a portion of the funding package could include loans from the federal Small Business Administration and from the city’s business assistance programs.
“The package is one-stop shopping for city, federal and private programs,” said Debra Cook, director of the city Department of Development.
• Scott Smith is a Kokomo Tribune staff writer. He may be reached at 765-454-8569 or via e-mail at scott.smith@kokomotribune.com
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