2006 Section 108 Project Summaries - Pennsylvania

Penn Avenue Redevelopment
Berks County, PA
Section 108 Guaranteed Loan- $1,500,000

The County of Berks has designated the Berks County Redevelopment Authority (RDA) to be the borrower of the Section 108 Guaranteed Loan. The RDA, in conjunction with the Borough of West Reading will revitalize commercial development and improve the downtown section of the Borough through the acquisition and demolition of an under utilized hotel located at 250 Pennsylvania Avenue. The cleared site will be sold to a developer who plans to build a 30,000 square foot office building. The West Reading Planning Commission and the County of Berks have officially designated the Penn Avenue Redevelopment Area as a slum, blighted, deteriorated or deteriorating area pursuant to the Pennsylvania �Urban Redevelopment Law� Act of 1945. The project will create an estimated 60 new full-time jobs.

The RDA will use the Section 108 Guaranteed Loan for the acquisition, relocation, demolition and clearance costs. In conjunction with the guaranteed loan funds, the RDA will utilize $750,000 in Community Development Block Grant (CDBG) funds, $1,250,000 in Business In Our Site funds, $1,000,000 in Hometown Streets funds, and $500,000 in Department of Community & Economic Development funds for a total project cost of $5,000,000.

The CDBG national objective for the RDA's use of the guaranteed loan funds is to aid in the eliminations of slums or blight on an area basis.

The RDA will repay the Section 108 Guaranteed Loan over a twenty-year period, paying interest only for the first four years. The RDA will use increased tax revenue from the County's Tax Increment Financing (TIF) district for this redevelopment area to repay the guaranteed loan. If these revenues are insufficient, the County will use its CDBG funds. To secure repayment of the guaranteed loan funds, the RDA pledges a first lien position on the real property and 51% of the of the estimated, annual increased tax revenue. The County also pledges its CDBG funds to secure the repayment of the Section 108 Guaranteed Loan.

Whitebrooke Hills Project
Chester County, PA
Section 108 Guaranteed Loan- $5,000,000

Chester County designated the Chester County Industrial Development Authority (CCIDA) to be the borrower of the Section 108 Guaranteed Loan. The CCIDA will provide the financial assistance to O'Neill Properties Group, Limited Partnership (LP), for the redevelopment of a 77-acre area, the former Worthington Steel site, into a mixed-use �new urbanism� town center in the Township of East Whiteland. The Town Center will consist of 350,000 square feet of retail space, approximately 500,000 square feet of office space, structured parking garages, and green space.

The CCIDA will re-lend the Section 108 Guaranteed Loan proceed to O'Neill Properties Group, LP, to finance the initial phase of the redevelopment, which includes the development of ten acres into 120,000 square feet of retail space and 523 parking spaces. In conjunction with the Section 108 Guaranteed Loan, CCIDA will also re-lend a $2,000,000 Brownfields Economic Development Initiative (BEDI) grant to O'Neill Properties Group, LP to finance some of the project's construction costs, along with some of the demolition, earthwork, and stream reclamation costs, and they will use $14,004,106 in Senior Financing funds and $10,009,703 in Equity/Subordinated Financing funds for a total project cost of $31,013,809.

The Community Development Block Grant (CDBG) national objective for the County's use of guaranteed loan funds is to benefit low-moderate income persons through job creation. The project will create an estimated 200 new full-time jobs.

The CCIDA will repay the Section 108 Guaranteed Loan over a twenty-year period, paying interest only for the first two years. The CCIDA will use project revenues from O'Neill Properties Group, LP to repay the loan. To secure repayment of the guaranteed loan, the County pledges its interest in its third-party loan to O'Neill Properties Group, LP, which will be secured by a second lien position on the project's land and improvements. The County also pledges its CDBG funds to secure the repayment of the Section 108 Guaranteed Loan.

Reading Hotel Project
Reading, PA
Section 108 Guaranteed Loan- $1,500,000

The City of Reading will provide financial assistance to a for profit Developer, Reading Hospitality Group, Limited Liability Corporation (LLC), for the acquisition of land, and the construction of a 200-room Crown Plaza Hotel. The land is currently owned by the Reading Redevelopment Authority and is located directly across from the recently completed Reading Convention Center. The hotel will be a 7-story, 234,000 square foot hotel with 17,000 square feet of ballroom space, 9,000 square feet of flexible meeting space, retail space and recreational facilities.

The City will re-loan the Section 108 Guaranteed Loan proceeds to Reading Hospitality Group, LLC, in conjunction with a $1,000,000 Brownfields Economic Development Initiative (BEDI) grant awarded by HUD in the fiscal year 2005 to help complete the project. The City has also obtained a $17,000,000 loan from Roosevelt & Cross, a private underwriter based in New York City, for a total cost of $29,000,000.

The Community Development Block Grant (CDBG) national objective for the City's use of guaranteed loan funds is to benefit low-moderate income persons through job creation. The project will create an estimated 110 new full-time jobs.

The City will repay its Section 108 Guaranteed Loan over a 20-year period, paying interest only for the first two years. To secure repayment of the guaranteed loan proceeds, the City pledges its interest in the third-party loan, which is secured by a second lien position on the project's land and improvements. The City also pledges its CDBG funds for repayment of its guaranteed loan.