SYKESVILLE — The developer of the Raincliffe Center has one more hurdle to jump to complete financing arrangements.
David W. Moxley, project manager for the $3.5 million, 32-acre, industrial-commercial center, told the council Monday night he needs final town authorization to get a $1.5 million loan package from the state and county.
Last April, the council passed a loan package consisting of threeordinances and two resolutions that would enable partial financing of the center. The ordinances authorized a $500,000 loan from the Maryland Industrial Land Act, a $750,000 loan from the Maryland Industrial and Commercial Redevelopment Fund and a $250,000 county loan.
The loans are being made to the town, which, in turn, lends the money to Security Enterprises Inc. of Ellicott City, Howard County. The two resolutions created special tax districts for the center, needed to guarantee that revenue generated by the center goes to repay the loan to the town.
The Raincliffe Center is a first for the town, in that the project is being partially financed by Sykesville through the loan agreements with the state and county.
Although the previous Town Council questioned the town administering the loan, state officials said it would make the terms and execution of the loan less rigid than if arrangements were made through a bank.
"It would get half the project financed at below-market rates in a very, very tough market to get financing," Moxley said.
Since the town approved the loanpackage, the developer, state, county and town have been working to complete the agreements. Before the state approves the loans, it is requiring the town to grant proper authorization.
"The state wanteda special, separate ordinance to approve the promissory note for lending the $1.5 million," said Town Manager James L. Schumacher.
To do that, attorneys for the town are drafting a fourth ordinance authorizing the loans. The council then must repeal the original loan package and re-introduce it with the new ordinance at a public hearing 8 p.m. Oct. 28.
Moxley said that once the town gives formal approval, Security Enterprises can go to the state Department of Public Worksfor ratification of the loan package. An interview for ratification tentatively has been scheduled for Nov. 6.
Security still needs $2million in conventional bank loans before construction can start next spring.
"We've been actively marketing the project and working to get the conventional funding," he said.
At capacity, the center is projected to offer 250,000 square feet of industrial space and 100,000 square feet of commercial space.
The completed business center is expected to bring in some $70,000 annually in taxes, about 25 percent of the town's budget.