2006 Section 108 Project Summaries - Ohio

Tinker's Creek Commerce Park
Cuyahoga County, OH
Section 108 Guaranteed Loan- $ 4,000,000

Cuyahoga County will make a loan of its $4,000,000 in its Section 108 Guaranteed Loan proceeds to 200 Egbert Road, Limited Liability Corporation (LLC), a for-profit affiliate of Hemisphere Development LLC, a for-profit entity for the 1) remediation and site preparation of a vacant 50-acre industrial property and the 2) construction of a 100,000 square foot office/warehouse complex on a 10-acre parcel within this industrial site. 200 Egbert Road, LLC will remediate 40 of the 50 acres that are contaminated with oil, copper powder, iron oxides, and ammonia. The 50 acre site is in the City of Bedford, located in the southeastern part of the County. This 10 acre commercial project is part of the larger Tinkers Creek Commerce Redevelopment, which will be comprised of 400,000 square feet of new office and commercial/industrial space.

In conjunction with the Section 108 Guaranteed Loan, the County will grant $2,000,000 in Brownfields Economic Development Initiative (BEDI) funds from the 2004 fiscal year towards the establishment of a debt service reserve, environmental remediation, and construction of site infrastructure. The total cost of the project is $15,604,342.

The Community Development Block Grant (CDBG) national objective for the County's use of the guaranteed loan funds for special economic development assistance to a for profit entity is to benefit low-moderate income persons through job creation. The 10 acre commercial project that 200 Egbert Road, LLC will carry out will cause the creation of an estimated 172 new full-time jobs. The larger Tinkers Creek Commerce Redevelopment project, which includes this project, will cause the creation of an estimated 500 new full-time jobs.

The County will repay its Section 108 Guaranteed Loan over a nineteen-year period, paying interest only for the first four years. 200 Egbert Road, LLC will use project lease revenues to repay its loan from the County. As security for the repayment of its Section 108 Guaranteed Loan, the County pledges its interest in its third-party loan to 200 Egbert Road, LLC which will be secured by a first lien position on the forty-acre site, as well as a second lien position on the Project's 100,000 square foot office/warehouse space complex. As part of the additional loan security for the County's Section 108 Guaranteed Loan, the County will also assign to HUD a corporate guarantee from 200 Egbert Road LLC, for the 10-acre project cash flow, in the event that operating expenses exceed operating revenues any time during any operating year (s). The County also pledges its CDBG funds as security for repayment of its Section 108 Guaranteed Loan.