The Jefferson County Local Development Corp. will increase its loan toward Stream Internationals capital project from $400,000 to $500,000.
The increased loan from the JCLDC, a subagency of the Jefferson County Industrial Development Agency, was approved by the JCIDAs loan review committee Tuesday after it discovered the North Country Alliances bylaws prevent it from making a planned $100,000 loan. The alliance is a public-private consortium of economic development agencies serving seven counties in the region.
Expanding the loan to cover the loss of the alliance money was needed for the committee to approve Streams five-year lease extension, in which the company will make lease payments to repay a $1 million loan package from public agencies to help fund the $4.2 million expansion at its 146 Arsenal St. call center. The project will enable the company to hire 300 additional employees, adding a major customer contract to do so.
Along with the JCLDCs loan of $500,000, the Development Authority of the North Country and the Watertown Local Development Corp., also known as the Watertown Trust, will each pitch in $250,000 toward the capital project. JCIDA, owner of the 76,000-square-foot Stream building, will serve as the recipient of the $1 million loan package by taking in loans from the agencies, and then transferring the funds to Stream. Stream will pay back that $1 million over the five-year lease with monthly rent payments of about $18,000, which accounts for the 5 percent interest rate on the loans. The agency then will funnel Streams payments back to the three agencies.
JCIDA CEO Donald C. Alexander said the North Country Alliance could not legally provide its loan because JCIDA would not offer its own guarantee in addition to the collateral agreement. JCIDA has pledged the mortgage on the building as collateral to finance the project, Mr. Alexander said, and North Country Alliance would have had a second position to foreclose on that mortgage behind M&T bank. But to comply with North Country Alliance bylaws, JCIDA would have had to provide a guarantee for additional protection.
If the collateral wasnt sufficient to cover the loan, the IDA would have been responsible for paying it back, Mr. Alexander said. But we didnt want to provide a guarantee beyond the basis of collateral, because the buildings value provides plenty of collateral to cover the loans.
The 76,000-square-foot building was appraised in June by DGM Coon & Co., Watertown, at $5.8 million.
Committee member W. Edward Walldroff asked officials during the meeting why JCIDA didnt seek to have DANC or the Watertown Trustwhich are contributing lesser amounts for the Stream project provide the $100,000.
Lyle V. Eaton, chief financial officer, said it made better sense for the agency to put money sitting in the JCLDCs cash reserve fund to good use.
Why would we not want to lend the money? he said. Were talking about a very secure loan here. And we want that money working to collect interest, because now its just sitting there.
M&T Bank is negotiating a loan with Stream for $1.3 million that will go toward its capital project, Mr. Alexander said. The bank initially had planned to issue the loan to the JCIDA, but it now is considering lending the money directly to Stream. M&T will have the first position on the buildings mortgage under that plan, while DANC and the Watertown Trust will share second position.
If approved, Streams lease would take effect Oct. 1.
The agencys board will hold a final vote Aug. 1 on Streams lease.
Mr. Alexander also updated the committee on the status of maintenance projects planned at the Stream building this summer. Workers recently finished installing a dumpster enclosure in the lower-level parking lot owned by the agency at the buildings north side facing Court Street, he said. That enclosure, which cost the agency $24,690, was built after tenants at City Center Plaza complained about trash flowing from dumpsters into the parking lot.
The agency also has planned a $75,425 project to renovate the concrete outdoor deck area used by Stream on the second story of the buildings north side. Work will include replacement of the concrete walkway in front of the entry doors, replacement of the eastern side of the concrete deck and painting of the steel underside of the walkway. Repairs for that project will be split between Capital Construction and P&M Construction, Watertown.
Also planned is a $24,000 project to complete facade repairs on all sides of the building at areas that have deteriorated. That work will be done by CC McCready Masonry of Clayton.