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1 <br /> <br /> <br /> <br />To: Mayor Muckle and City Council <br />Date: February 15, 2013 <br />Re: Revolving Loan Program <br /> <br />At times in the past, we have very briefly discussed the advisability of a revolving loan <br />program with you. However, due to limited resources, we have all focused our attention on <br />developing a grant program within the Historic Preservation Fund (HPF). Now that the grant <br />program is on solid footing, and the Historic Preservation Tax (HPT) is nearing the halfway <br />point of its life (unless extended), we feel that it is an appropriate time to develop a loan <br />program. <br />Ballot Issue 2A, adopted by Louisville voters in 2008, specifically authorized funding <br />from the Historic Preservation Fund (HPF) for “grants and low interest loans to preserve and <br />rehabilitate eligible properties”. This was followed by Council Resolution No. 20 (2009), which <br />stated in §3 that uses of the HPF would include: <br /> <br />“ii. Low-interest loans to fund the restoration and rehabilitation of existing resources. <br />The loans shall be administered by the City or a designee appointed by City Council, with <br />loan payments returning to the HPF. Loans shall be evidenced by a loan agreement, <br />guaranteed by the borrower (with individual guarantees as the City may in its discretion <br />require), and secured by a lien on the property. The loan may provide for default and <br />acceleration of the loan if the completed work is not contemplated by the conditions of <br />the loan. Further, if the work is not completed in compliance with the conditions of the <br />loan, the loan amount shall be returned forthwith, with interest. Any costs in collecting <br />the loan upon default shall be charged to the HPF;” <br /> <br />Clear authority exists to establish an HPF loan program, and perhaps was even anticipated by the <br />voters when the Historic Preservation Tax was established. <br />For the long-term health of the HPF, we think it is time to strongly consider a loan <br />program. Unless the tax is extended by the voters, or other sources of funding are found, the <br />HPF will quickly deplete upon the sunset of the tax, particularly with major projects like the <br />Grain Elevator. A revolving loan fund would allow the HPF to survive even without additional <br />funding and maximize the number of property owners that can be helped, and in perhaps greater <br />amounts. In many cases, particularly large projects, loans might be a more appropriate method <br />of funding that grants, since it requires a greater commitment from the property owner. A <br />combination of grants and loans may be a more effective package of assistance than only grants <br />for some projects. <br /> There are many examples of successful revolving loan programs for historic funding <br />which can be consulted. The Colorado Historical Foundation (CHF) offers below-market loans <br />for historic preservation purposes, generally between $100,000 and $750,000. <br />http://www.cohf.org/revolvingloanfund.html The CHF program has existed for about nine years <br />and has issued 13 loans. CHF partners with the Colorado Housing & Finance Authority <br />(CHFA), which does the financial analysis, loan servicing and collection (and charges a 1% <br />Louisville Historic Preservation Commission <br />749 Main Street  Louisville CO 80027  303.335.4592  www.louisvilleco.gov <br />12