(A) Definitions. For the purpose of this section the following definitions shall apply unless the context clearly indicates or requires a different meaning.
BOARD. The Revolving Loan Fund Administration Board created under division (E) of this section.
BORROWER. An individual, a firm, an association, a joint venture, a partnership, a limited liability company, an estate, a trust, a syndicate, a fiduciary, a corporation, or any other group or combination thereof, that applied for a loan from the Fund under division (C) of this section.
CITY. The City of Rising Sun, Indiana.
FUND. The Revolving Loan Fund established in division (B) of this section.
MARKET VALUE. Fair market appraised value as determined by a qualified appraiser.
NECESSARY OR APPROPRIATE. That the assistance or loan results, or is intended to result, in: (i) private sector job creation, or retention; and (ii) promoting the economic development, redevelopment, or stabilization of the city.
PROJECT AGREEMENT. The development agreement between the city and Grand Victoria Casino & Resort, L.P., formerly known as Rising Sun Riverboat Casino and Resort, LLC, and all amendments thereto.
(B) Fund established.
(1) There is hereby re-established the Rising Sun Revolving Loan Fund (“Fund”), as a separate, nonreverting fund of the city for the purpose of promoting economic development in the city.
(2) The Fund shall consist of:
(a) Money allocated under the Project Agreement between the city and Grand Victoria Casino & Resort, L.P., formerly known as Rising Sun Riverboat Casino and Resort, LLC;
(b) Money received from the repayment of loans from the Fund; and
(c) Money from any other legally available source.
(3) The Fund can request the city appropriate additional money to the Fund for specific projects or for additional loans and the city will consider the request on a case-by-case basis.
(4) The Board shall have overall responsibility for the administration of the Fund, including the authority to approve loans from money in the Fund for the purpose of promoting economic development in the city.
(C) Loans authorized.
(1) The Board may make a loan or line of credit from the Fund if it finds, in writing, that the loan would enable the borrower to undertake one or more projects that will result or are intended to result in private sector job creation or retention and contributes to the economic development, redevelopment or stabilization (which shall include, where appropriate, housing projects that the Board deems, in writing, would be a substantial benefit to the city) of the city, including but not limited to:
(a) Commercial activities, including assistance for light manufacturing, agribusiness, tourism, retail, and service industries;
(b) Projects that encourage direct private sector job creation or retention by provision of needed capital for the start-up, expansion or retention of business;
(c) Projects that allow the business to expand facilities, establish new facilities, or make site improvements or infrastructure improvements;
(d) Projects that rehabilitate, restore, revitalize or improve Main Street buildings; and
(e) Housing projects that are permitted by division (H)(11)(a) as added by Ord. 2016-12.
(2) A borrower desiring to obtain a loan from the Fund must submit an application to the Board, which must contain the following information:
(a) The name of the borrower;
(b) Whether the borrower is an individual, a firm, an association, a joint venture, a partnership, a limited liability company, an estate, a trust, a syndicate, a fiduciary, a corporation, or any other group or combination thereof;
(c) Evidence that the borrower is an entity in good standing with the state;
(d) A description of the project for which the borrower desires to obtain a loan from the Fund;
(e) The proposed principal amount of the loan;
(f) The proposed term of the loan;
(g) The proposed interest rate or rates; and
(h) Any other information which the Board considers necessary or appropriate in order to make an informed decision concerning the loan application.
(3) Upon receipt of an application for a loan from the Fund, the Board shall:
(a) Review the information provided by the borrower on the application;
(b) Request any additional information it believes necessary or appropriate in order to evaluate the application; and
(c) Approve, disapprove, or modify a request for a loan from the Fund.
(4) The determination of the Board shall include the:
(a) Term of the loan;
(b) Maximum principal amount;
(c) The interest rate or rates;
(d) Payment schedule; and
(e) Any other reasonable terms and conditions it considers necessary or appropriate to secure the loan.
(5) A loan agreement with the Board under this section must contain:
(a) A requirement that the loan proceeds be used for the purposes specified in the borrower's loan application and consistent with this section;
(b) The term of the loan, which may not exceed 20 years from the date of the loan;
(c) The repayment schedule;
(d) The interest rate or rates of the loan, which may include variations in the rate, but that may not be less than the amount necessary to cover all expenses of the Board in making the loan; and
(e) Any other terms and provisions that the Board determines to be necessary or appropriate to secure the loan.
(D) Line of credit. The Board may issue a line of credit, in lieu of a loan, to provide initial start-up funding for a project if the project is sponsored and/or supported by the city and/or the Rising Sun Redevelopment Commission and the Board determines, in writing, that the project in question would be a substantial benefit to the citizens of Rising Sun. Said line of credit may be issued for any project authorized by these by-laws including, but not limited to, the exception made by Ord. 2016-12 which amended division (H)(11) of the revolving loan fund by-laws. Any line of credit issued by the Revolving Loan Fund Board must be approved by the Common Council of the city.
(E) Transfer of funds. The Board may transfer funds to the Rising Sun Redevelopment Commission for a project if the project is sponsored and/or supported by the city and/or the Rising Sun Redevelopment Commission. Funds may only be transferred by a resolution of the Board with a finding that the project in question would be a substantial benefit to the citizens of Rising Sun. Any conditions for the transfer of funds that the Board deems necessary shall be included in the resolution. Funds may be transferred for any project authorized in this section. A resolution adopted by the Board to transfer funds to the Rising Sun Redevelopment Commission must also be approved by the Common Council of the city. Funds transferred by the Board to the Rising Sun Redevelopment Commission are not required to be repaid unless repayment is a condition included in the adopted resolution.
(F) Revolving Loan Fund Administration Board established.
(1) The Revolving Loan Fund Administration Board, with broad community representation, is hereby established for the purpose of making loans from the Fund.
(2) The Board shall:
(a) Review loan applications, request from the borrower any additional information which the Board believes is necessary or desirable in order to evaluate the application;
(b) Approve, disapprove or modify a loan application;
(c) If the Board has made a determination in favor of the loan, the Board shall also determine the:
1. Term of the loan;
2. Maximum principal amount;
3. The interest rate or rates;
4. Payment schedule; and
5. Any other reasonable terms and conditions it considers necessary or desirable to secure the loan;
(d) Determine the activities which are eligible for a loan; and
(e) Adopt policies that are intended to diversify:
1. The type of activities for which loans are made; and
2. The types of loans actually made.
(3) The Board shall consist of five residents of the city, with members from both the public and private sectors. At least one member shall have business, financing or banking experience. A member who ceases to be a city resident shall forfeit the member's position on the Board.
(4) Membership on the Board shall be as follows:
(a) Three members appointed by the Mayor to serve at the pleasure of the Mayor;
(b) Two members appointed by the Common Council to serve at the pleasure of the Common Council.
(5) Members of the Board shall be entitled to a per diem of $50 per meeting not to exceed $100 in any calendar month.
(6) The Clerk-Treasurer of the city shall serve as Executive Director of the Revolving Loan Fund Administration Board and shall be entitled to a per diem of $100 per meeting not to exceed $200 in any calendar month.
(7) As Executive Director of the Revolving Loan Fund Administration Board the Clerk Treasurer shall be responsible for managing and administering the day to day business and affairs of the Revolving Loan Fund, maintaining the books and records of the same, including financial, business and legal records and documents regarding the loan applications to the same and the loans made by the same, and for performing such other duties related to the Board the same as may be designated by the Board. For said services, the Executive Director shall be a part time compensated position, with compensation fixed in the sum of $100 per month as approved by Council on the Salary Ordinance for the year 2013. The Clerk Treasurer may designate these responsibilities and compensation to a Deputy Clerk.
(G) Eligible activities. The Board shall, to the extent feasible, diversify the activities for which it will approve loans or lines of credit. Eligible types of activities include:
(1) Long-term loans for the acquisition or improvement of land, buildings, plant, and capital equipment, including new construction or renovation of existing facilities, demolition and site preparation;
(2) Short-term loans to provide for the acquisition of initial inventory, cash flow needs, marketing programs, working capital and other business expenses;
(3) Matching loans to provide for down payments on land, buildings, plant, and capital equipment;
(4) Interest rate subsidies or "buy-downs" for commercial financing as set forth in divisions (G)(1), (2), and (3) above; and
(5) A line of credit as authorized by division (D) of this section.
(H) Ineligible activities. The Board may not make loans for the following activities:
(1) Loans solely for the refinancing of existing debt;
(2) Financing of highly speculative projects, activities or buildings;
(3) Financing of historically uncompetitive or unsuccessful ventures;
(4) Financing of projects involving unresolved or unindemnified environmental problems;
(5) Financing of projects that do not comply with applicable zoning ordinances, rules and regulations, licensing requirements, or other local, state and federal requirements;
(6) Projects that are for illegal purposes;
(7) Financing for applicants that have a history of civil rights or equal employment opportunity violations or unfair labor practices or are unwilling to offer equal opportunities in employment to minorities and women;
(8) Financing of projects that cannot demonstrate the ability to repay the loan;
(9) Financing for applicants that are not current with their present obligations including local, state, and federal taxes or other loans;
(10) Financing for projects for intra-family transactions; and
(11) Financing for projects that are primarily residential in nature, including singe family houses, apartments, and condominiums, unless this prohibition is waived pursuant to division (a), below:
(a) The Board may waive this prohibition and recommend loans for approval to the Common Council of Rising Sun for housing projects involving apartments, condominiums, and/or single family units that are being sponsored and/or supported by the city and/or the Rising Sun Redevelopment Commission if the Board believes it is in the best interest of the city and would be a substantial benefit to the citizens of the city if a loan for apartments, condominiums, and/or single family units were to be approved; and
(b) The prohibition against individual loans for single family houses may not be waived by the Board.
(I) Additional eligibility criteria.
(1) Eligible borrowers for financial assistance may include private for-profit businesses, retail, commercial and industrial concerns. Such concerns may be:
(a) For the creation of new businesses, expansion of existing businesses, or for retention of existing businesses;
(b) Ownership need not be local, but the project must be located within the city;
(c) Small or large businesses, although small businesses will be given preference.
(2) No borrower may be denied a loan based on race, color, national origin, religion, age, physical disability, or sex.
(3) Special consideration will be given to a borrower that meets one or more of the following criteria:
(a) Primary borrower(s) is/are resident(s) of Rising Sun or Ohio County, Indiana;
(b) Minority business enterprise;
(c) Women's business enterprise;
(d) High growth potential;
(e) High level of linkage within local economy or potential of same and conformity within Ohio County's adopted tourism and marketing plan;
(f) Introduction of new goods and services to local economy;
(g) Redevelopment of blighted land in need of redevelopment and/or vacant land and/or facilities for productive uses;
(h) High level of job creation; and
(i) Retention of employment opportunities.
(J) Financing policies.
(1) Except as otherwise determined by the Board the maximum amount of all loans outstanding to a single borrower may not exceed $ 120,000. The Board may waive this policy if the Board determines, in writing, that the project will significantly benefit the city.
(2) Guidelines for the terms and the repayment of loans are as follows:
(a) The maximum term of a loan shall not exceed 20 years for real estate projects or improvements secured by a mortgage on real estate (including projects with land purchase, building construction, of renovation of site improvements). If secured by real estate, total loans may not exceed 95% of the market value of the real estate.
(b) The maximum term of a loan shall not exceed ten years for loans secured by equipment, fixtures, inventory, or furnishings. The loan may not exceed 75% of the market value of the collateral securing said loan.
(c) The maximum term of a loan shall not exceed ten years for working capital loans. The Board will obtain collateral on the loan including liens on inventories, receivables, fixed assets, and/or other available assets of borrowers, as is recommended by the Board. Such liens may be subordinate only to existing liens of record and other loans involved in the project.
(d) These terms may be deviated from for reasons, outlined in writing, acceptable to the Board and may include, but are not limited to the following:
1. Availability of start-up funds;
2. Projects involving new companies may require a longer repayment term;
3. Projects involving leasing as opposed to purchasing real estate or buildings may require different or additional terms; and
4. Any other reason found in writing to be acceptable or necessary by a majority of the membership of the Board.
(3) The interest rate or rates to be charged by the program will be established based upon prevailing market conditions but may not be less than the amount necessary to cover all expenses of the Board in making and administering the loan.
(a) The rates are to be determined by the Board after a review of all relevant factors at the first Board meeting when funds become available for the program and are to be reviewed and adjusted as deemed necessary by the Board.
(b) The Board, shall establish a table of loan terms.
(c) The table of loan terms upon adoption by the Board may be published in a newspaper of local distribution and shall be made available to borrowers applicants or other interested persons in any office maintained by the city during regular business hours.
(4) The Board shall establish a repayment schedule following regular business practices.
(5) A late penalty of 5% of the payment due may be required according to the terms and conditions of the loan agreement.
(6) To meet the financial and credit needs of a business or industry, upon a written determination of the Board, special financing techniques may be offered to the borrower, including but not limited to:
(a) Interest only payments for up to two years;
(b) Subordination of loans to primary and secondary lenders;
(c) Balloon payments; and
(d) A line of credit as permitted by division (D) of this section.
(7) In recommending collateral requirements, the Board may consider the merits and potential economic benefits of each request. When appropriate and practical, the loan may be secured by liens or assignments of rights in assets of the borrowers as follows:
(a) In order to encourage financial participation in a direct fixed asset loan project by other lenders and investors, the term of the loan may be for a longer period than that of the other lender(s). The lien position of the loan may be subordinate to the lien or liens securing other loans made in connection with the project;
(b) In projects involving fixed asset loans, the Board will obtain a lien on the asset(s) to be financed and other assets of the company as the Board determines to be appropriate;
(c) In addition to the above types of security, the Board may require security in the form of assignments of patents and licenses, leases or stock certificates, and such additional security as appropriate;
(d) To the maximum extent possible, all loans should be additionally secured by guarantees for project completion and for loan repayment;
(e) The borrower must obtain adequate fire, hazard, and other forms of insurance as appropriate and provide the Board with a lender's loss payable endorsement;
(f) Applications submitted by closely held corporations, partnerships, or sole proprietorships dependent for their continuing success on certain individuals may be required to provide key employee insurance on these persons and/or personal guarantees;
(g) Modification of the terms under which a loan has been made may be recommended by the Board to enhance the capability of the loan program in achieving its objectives;
(h) The loan shall at the option of the Board, be immediately due and payable upon failure to make any payment due hereunder or for breach of any condition of any security interest, mortgage, pledge agreement or guaranty granted as collateral security for the loan or breach of any condition of any security agreement or mortgage, if any, having a priority over any security agreement or mortgage on collateral granted, in whole or in part, as collateral security for the note or upon the filing by any of the undersigned of an assignment for the benefit of creditors, bankruptcy, or for relief under any provisions of the United States Bankruptcy Code; or by suffering an involuntary petition in bankruptcy or receivership; and
(i) In the event that the Board determines that further action is required to protect the loan program, the Board may take action to sell, collect, liquidate, or otherwise recover monies loaned under the program according to law.
(8) Restructuring of loans will be allowed only if the restructuring improves the borrower's repayment ability.
(9) The loan agreement must specify the loan is not transferable and require that the loan be due and payable in full if the borrower's business relocates its operations from within the area during the term of the loan, or sells the business, real estate, or security on the loan.
(10) All borrowers must file a formal application with the Board. The Board may require additional information to determine whether:
(a) The project is feasible, "necessary or appropriate"; and
(b) That the project will go forward if a loan is provided.
(11) Charges may be assessed to a prospective borrower to cover specific expenses attributable to the application, including but not limited to the following:
(a) Title searches and/or title insurance premiums;
(b) Escrow and/or construction affidavit expenses;
(c) Legal fees, accounting services, surveys, appraisal and other fees associated with the preparation and filing of the application;
(d) Loan servicing fees; and
(e) An additional fee may be required for loan processing, administration, and monitoring, payable at the time of loan closing.
(Ord. 2007-5, passed 9-6-07; Am. Ord. 2013-3, passed 6-6-13; Am. Ord. 2016-12, passed 8-4-16; Am. Ord. 2017-4, passed 4-6-17; Am. Ord. 2020-5, passed 7-2-20)