7 local lenders ‘Banking on Rome’
Help is again available for investors who want to buy or fix up their downtown commercial buildings with dreams of putting them to use.
Seven local banks announced Tuesday they would make as much as $1.4 million available to buy, rehabilitate and equip properties in downtown Rome.
Heritage First Bank, River City Bank, Greater Community Bank, Citizens First Bank, Regions Bank, United Community Bank and Wells Fargo Bank have each committed up to $200,000 to the program.
SunTrust and Bank of the Ozarks are the only banks with Rome offices that are not participating in the program.
“This is so awesome; this is a huge day for downtown,” said Ann Arnold, director of the Downtown Development Authority.
Rome has hit its borrowing cap from the Georgia Department of Community Affairs and Georgia Cities Foundation revolving loan funds. The rules of each organization prohibit more than 15 percent of their outstanding loan balances to be concentrated in any one community.
The banks came together to create a locally based fund to continue revitalization efforts.
“Inside every crisis lies an opportunity,” said DDA Chairman Steven McDowell.
Steve White, VP for private client services at Citizens First and a DDA member, said the two state loan programs have facilitated tremendous growth in Rome.
In the past 15 years Rome has received $4.49 million from the DCA Revolving Loan Fund and $3.35 million from the Georgia Cities Foundation.
When those programs dried up in 2015, White convened a meeting of local bankers and the “Banking on Downtown” program was hatched in less than five months.
Ryan Earnest, president of Heritage First, is chairman of the new bankers group.
“The collaboration that we have been able to accomplish here will serve downtown well,” he said. “There is a lot of momentum in downtown Rome.”
The banks will provide the vast majority of financing for a given project, but the property owner will be required to put up 10 percent.
Earnest said Arnold will continue to do all the
preliminary legwork she’s done with the state loan programs.
When a prospect is ready to move forward with a loan application, the paperwork will be presented to the banks in alphabetical order. If Citizens First decides to pass
or has used up its allocation, the project will go to Greater Community Bank, and so on down the line.
The draw for investors is the low interest rate. The DCA loans were generally available at 2 percent while the Georgia Cities loans were generally
made at 3 percent.
Earnest said the Banking on Downtown program would make money available across three tiers — a 10-year loan at the prime lending rate, a 7-year loan at prime minus a quarterpoint and a 5-year note at prime minus a half-point. On Tuesday the prime rate was 3.5 percent.
The investor also will pay the lender an origination fee of $500 at closing.
“What is really cool is that this is a fixed-rate loan,” said Roger Smith, president at River City Bank.
Smith also pointed out that while each of the banks has committed at least $200,000 to the program, the banks are not limited to that amount.
Arnold said when the DCA and Georgia Cities became unavailable late last year she had as many as seven potential projects that were unfunded.
Currently, she said she has two potential loan projects she will start working on immediately.