Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: The proposed amendments are administrative
in nature and pertain to the administration of the Historic Preservation
Revolving Fund.
(1) The
department may loan money from the fund only after it has been determined a
loan is the best way to preserve an historic property. Loans may be made to pay
for all or part of costs associated with purchase, stabilization,
rehabilitation, development, marketing, maintenance or restoration of an
historic property.
(2) Loans may be
made to the property owner, or to any other person, corporation, governmental
entity or to a nonprofit organization registered with the secretary of state;
provided, that the property owner approves of the loan and a security interest
in the real property can be provided to the department.
(A) Loans to individuals may be made for
properties requiring stabilization in order to qualify for financing from a
commercial bank, savings and loan or other financial institution.
(B) Loans to for-profit corporations may be
made only in cases of extreme endangerment, shall be of short-term duration and
shall be repaid immediately upon obtaining alternate financing.
(C) Loans to governmental entities and
nonprofit organizations may be made for preservation purposes as deemed
appropriate by the department.
(3) Acquisition, stabilization,
rehabilitation, development, marketing, maintenance or restoration projects, or
a combination of these, for properties that fail to meet the requirements of
10 CSR
90-3.020(1) shall not be eligible for
a loan from the fund.
(4)Loans will
be considered upon application submitted to and approved by the department.
Each application for a loan must provide all available information relating to
the following loan criteria:
(A) Economic
Feasibility-applicants must provide a detailed outline of the project being
funded and adequately demonstrate the ability to generate sufficient income
from the project to repay the requested loan. Adequate demonstration may be
established by submission of the following information:
1. Total amount of funding required to
complete the project;
2. Total
amount of funding being requested from the revolving fund;
3. How and why the money being requested from
the fund is necessary for preservation of the property's historic
character;
4. How additional
funding for the project will be obtained, including what other funding sources
money has been requested from, what other sources have approved funding for the
project, and the terms and conditions of other funding;
5. Evidence of the current appraised value of
the property (preferably by an appraisal less than six (6) months old) and
estimated appraised value of the completed project;
6. A complete description of the project and
intended use of all funds, including description of the current condition and
use of the property, description of proposed rehabilitation and use of the
property, all contractor's cost estimates for rehabilitation and all
architect's plans for rehabilitation;
7. Proposed methods of loan repayment (for
example, if repayment depends on fund-raising, a complete description of
fund-raising plans);
8. Proposed
collateral to secure repayment to the fund; and
9. Any other information pertinent to the
feasibility of the proposed project or repayment of the loan from the
fund;
(B) Financial
Strength, Stability and History of Applicant-applicants must adequately
demonstrate sufficient financial strength and stability to assure repayment of
the requested loan. Adequate demonstration may be established by submission of
information necessary to assess the financial strength and stability of the
applicant, including:
1. For individuals,
unincorporated businesses and closely held corporations-
A. A current credit bureau report on all loan
applicants, guarantors or company principals;
B. Signed current personal financial
statement for all loan applicants, guarantors or company principals;
C. Dun & Bradstreet corporate rating (if
available) and company's financial statements for the past three (3) fiscal
years (If statements are more than six (6) months old, include the most recent
quarterly statement available and the matching quarterly statement from the
previous year.);
D. Tax returns for
the previous three (3) years; and
E. Projections for two (2) years (balance
sheet and income statement, with appropriate justification of
projections);
2. For
publicly held corporations-
A. Dun &
Bradstreet corporate rating;
B.
Corporate financial statements for the past three (3) years (If statements are
more than six (6) months old, include the most recent quarterly statement
available and the matching quarterly statement from the previous year.);
and
C. The most recent annual
corporate report;
3. For
governmental entities-
A. Moody's bond
ratings; and
B. Fiscal reports for
the previous year(s) up to three (3) years depending upon size of annual budget
and population served; and
4. For nonprofit organizations-
A. Financial statements for the previous
year(s) up to three (3) years prepared by an accountant or signed by the
president; and
B. Tax information
including letter indicating 501(c)3 status (Note: All financial statements
should include balance sheet, income statements and any supporting schedules.
If not prepared by an accountant, financial statements should be signed by the
company's president or treasurer. Financial statements from any parent or
affiliate company should be submitted as outlined in this rule.);
(C) Other Liens or
Mortgages on Property-disclosure of all present existing, as well as reasonably
anticipated, liens or mortgages, or both, on the property and the effect on the
security interest to be granted to the department;
(D) Availability of Additional Financial
Assistance-disclosure of all known additional financial assistance available
for the project; and
(E) Resumes of
Project Management-give experience and qualifications of architect, contractors
and project supervisor.
(5) Each application shall be reviewed by the
department in accordance with the criteria set forth in section (4) of this
rule. Additionally, the department also shall consider the status of the
property to be benefitted by the loan in accordance with the criteria set forth
in
10 CSR
90-3.020(2)(A), (B) and (E)-(I).
Using these criteria, the department will determine whether the loan
application is acceptable and whether a loan from the fund for the subject
project would be prudent and appropriate use of fund monies.
(6) Loan applications may be denied on the
sole basis of availability of funds.
(7) The department shall notify the applicant
in writing of its determination on the application.
(8) For those loan applications determined by
the department to be acceptable as a prudent and appropriate expenditure of
fund monies, the department will notify the applicant of the available loan
terms.
(9) Unless expressly waived
by the department, the terms for every loan, at a minimum, shall include:
(A) Interest Rate-all outstanding loan
balances shall be charged a rate of interest considered by the department to be
appropriate, but in no event lower than one and one-half percent (1 1/2%) below
the New York prime interest rate. This rate is to be established at the time
the loan agreement is signed by the loan recipient. Lesser interest rates on
loans to nonprofit organizations may be allowed at the department's
discretion;
(B) Period of
Repayment-a period for repayment shall be established by the department equal
to the minimum length of time required to repay the loan;
(C) Promissory Note-execution of a promissory
note setting forth applicable repayment terms, interest rate and terms of
default;
(D) Loan
Agreement-execution of a written agreement to loan monies from the fund upon
the terms, conditions precedent, warranties, affirmative covenants, events of
default and other applicable and enforceable provisions established in the loan
agreement;
(E) Deed of
Trust-execution and recordation of a valid instrument granting the department a
security interest in the real property being benefitted by the loan or other
real property provided as security for the loan; and
(F) Title Insurance-a title insurance policy
naming the department as insured shall be secured by the loan
recipient.
(10) In
addition to the minimum loan terms set forth in section (9), all loans to
incorporated entities shall include the following terms:
(A) Corporate Resolution-a resolution duly
passed by the board of directors authorizing the execution and delivery of all
necessary loan documents;
(B)
Corporate Attorney's Letter of Opinion-a written legal opinion certifying that
the borrower is authorized to enter into the loan agreement;
(C) Corporate Certificate of Good
Standing-certification from the Missouri secretary of state's office that the
corporation is currently registered and in good standing in Missouri;
and
(D) Personal Guarantee-written
guaranties of repayment executed in favor of the department by all company
principals and their spouses owning twenty percent (20%) or more of equity and
key management employees.
(11) In addition to the minimum loan terms
set forth in section (9), all loans to governmental entities shall include a
resolution duly passed by the board or other governing body authorizing the
execution and delivery of all necessary loan documents.
(12) The department shall establish all other
terms upon which a loan may be made for each individual project.
(13) Terms of all loans must be approved in
writing by the director of the Department of Natural Resources. The department
will not be obligated to loan any money until a loan agreement has been signed
by all parties.
(14) Any property
benefitting from a loan by the fund shall be subjected to covenants meeting the
requirements of section
253.405
of the Historic Preservation Revolving Fund Act.
*Original authority: 253.035, RSMo 1961, amended 1967,
1983, 1993, 1995.
