City restructures one economic development loan
NORWICH – After months of discussion, the City of Norwich Common Council Tuesday authorized the restructuring of one outstanding economic development loan. After a great deal of work, the city says the economic and community development loans are back on track.
In November, Fourth Ward Alderman Walter Schermerhorn told the Council that city had 13 outstanding economic development loans, totaling $307,100. At the time, seven of the loans, totaling $144,900, were current and five of those were ahead on their payments. The remaining six loans, totaling $162,200, were behind in payments.
Only a few months later, the loan situation is greatly improved, city officials said. On Tuesday, one of the loans that had fallen behind in payments was restructured, which brought the loan up to date.
The loan, which was distributed to Betty Bytheway, Jean Blackburn and Valerie Geisler for the purpose of purchasing Paragon Communications, Inc., was issued in June of 2003. Due to subsequent business conditions, monthly payments fell behind, city officials said. In July of 2007, the city entered into a mortgage priority sharing agreement, in order to allow the borrowers to refinance their loan with NBT Bank.
The three business partners recently requested to have their loan restructured in order to bring their payments up to date. According to the terms of the resolution, Mayor Joseph Maiurano is authorized to execute an amending agreement to the original loan agreement, an up-front payment of $2,500 must be made against the balance, bringing the loan total to $68,787.35. The agreement calls for the loan to be repaid over a period of seven years, beginning with the first payment on March 1, 2008. The loan will include an interest rate of 5.4375 percent and calls for additional principal payments to be made in the amount of $2,400 in April of 2008 and $2,300 in May of 2008.
The council passed the resolution unanimously.
According to Maiurano, the city’s loan situation is in much better shape than it was in November. With the restructuring of the Paragon loan, the city now has a total of 15 economic and community development loans, with an outstanding balance of $373,999.22. Of those loans, only one borrower is behind in payments. Two of the loans were paid off entirely, and six are ahead in payments. The one borrower who is currently behind schedule has an outstanding balance of approximately $55,000, $15,500 of which is past due. The loan is behind by approximately 30 months, but Maiurano explained that the borrower had been making double payments in an effort to catch up.
“Everybody is now making payments,” Maiurano said. “We haven’t had anybody not since March. There’s been a big turn around since we initiated the system.”
In November, Fourth Ward Alderman Walter Schermerhorn told the Council that city had 13 outstanding economic development loans, totaling $307,100. At the time, seven of the loans, totaling $144,900, were current and five of those were ahead on their payments. The remaining six loans, totaling $162,200, were behind in payments.
Only a few months later, the loan situation is greatly improved, city officials said. On Tuesday, one of the loans that had fallen behind in payments was restructured, which brought the loan up to date.
The loan, which was distributed to Betty Bytheway, Jean Blackburn and Valerie Geisler for the purpose of purchasing Paragon Communications, Inc., was issued in June of 2003. Due to subsequent business conditions, monthly payments fell behind, city officials said. In July of 2007, the city entered into a mortgage priority sharing agreement, in order to allow the borrowers to refinance their loan with NBT Bank.
The three business partners recently requested to have their loan restructured in order to bring their payments up to date. According to the terms of the resolution, Mayor Joseph Maiurano is authorized to execute an amending agreement to the original loan agreement, an up-front payment of $2,500 must be made against the balance, bringing the loan total to $68,787.35. The agreement calls for the loan to be repaid over a period of seven years, beginning with the first payment on March 1, 2008. The loan will include an interest rate of 5.4375 percent and calls for additional principal payments to be made in the amount of $2,400 in April of 2008 and $2,300 in May of 2008.
The council passed the resolution unanimously.
According to Maiurano, the city’s loan situation is in much better shape than it was in November. With the restructuring of the Paragon loan, the city now has a total of 15 economic and community development loans, with an outstanding balance of $373,999.22. Of those loans, only one borrower is behind in payments. Two of the loans were paid off entirely, and six are ahead in payments. The one borrower who is currently behind schedule has an outstanding balance of approximately $55,000, $15,500 of which is past due. The loan is behind by approximately 30 months, but Maiurano explained that the borrower had been making double payments in an effort to catch up.
“Everybody is now making payments,” Maiurano said. “We haven’t had anybody not since March. There’s been a big turn around since we initiated the system.”
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