Funds there, but few show interest

Affordable bank loans for U.S. 1 revitalization fail to draw merchants

May 13, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Rakesh "RC" Shah has big plans for his fading motel business on U.S. 1 in southern Howard County.

He hopes to demolish part of his 50-year-old Valencia Motel & Efficiencies to make way for a new Sleep Inn. Shah, an experienced hotel owner, has the architectural plans ready and artists' drawings that show the two buildings sharing 4 acres at the gateway to Howard County in Laurel.

He is waiting for the county to approve his plans, and hopes to receive more affordable financing for the $4 million project through low-interest loans being offered by area banks to spur revitalization in the area.

"I'm interested in a loan right now," said Shah, who owns two other hotels on U.S. 1 in Prince George's County. "I'll be interested in more loans for more land so I can buy more hotels."

Shah could be a hopeful model for efforts to revitalize U.S. 1 - which is lined with aging motels, gasoline stations, pawn shops, manufacturing facilities, industrial parks and residential properties - into an upscale main street environment with retail and office space.

But so far, he's been the exception.

Money is available to help the business community along U.S. 1 spruce up the area, but few merchants have shown interest, county officials say.

Two local banks, hoping to jumpstart the long-awaited revitalization of the U.S. 1 corridor, have set aside a combined $25 million in low-interest financing for business and property owners, and other banks are expected to announce more money for the effort soon, county officials say.

Howard County's Economic Development Authority has agreed to review applications for compliance with the revitalization plan, but only one person has applied for a loan in the programs that began about a month ago, according to the agency.

"The need for capital is there. The ability to get cheaper money is a bonus," said Richard W. Story, executive director of the authority. "It may make the difference on whether a company does a project or not."

Although the loan programs were not developed in response to a need within the business community, bank officials say they hope the programs will lure other companies - particularly ones with higher-paying jobs - into the area.

"Hopefully, this will attract something other than fast food - hopefully manufacturing," said Robert Topper, vice president for Central Maryland of Allfirst Bank, which is offering a loan program.

Allfirst Financial Inc. has $15 million to lend to merchants along the U.S. 1 corridor, in amounts ranging from $50,000 to $3 million. Citizens National Bank is offering $10 million, in amounts ranging from $10,000 to $1 million.

Both banks' loans are a half-percentage point below prime rates, and carry terms up to 25 years - a bit longer than typical business loans - and each of the programs is open through the end of next year, or until the money runs out.

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