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|Indianapolis urban intersection gets makeover from Nottingham Realty, Indiana Statewide CDC, First Bank Richmond and Local Initiatives Support Corp.
A real estate broker is reviving commercial buildings near downtown that have been vacant for more than two decades.
A coalition of business financing and assistance groups is helping Mark Nottingham, owner of Nottingham Realty Group, purchase and renovate a 100-year-old building and a former gas station next door. (Neighborhood residents know the older building as "the foundry" because it once housed Herron School of Art's metal working shop and, before that, a factory to manufacture steam cars.)
Both buildings front 16th Street at Alabama. The older one opens this week as the office for Nottingham's realty group. In January, the former gas station becomes a restaurant called Foundry Provisions. About 20 people will be employed in the two businesses. The development will dramatically transform the intersection of 16th and Alabama, a mix of commercial buildings and Victorian homes dating back into the Civil War era in the Herron-Morton neighborhood.
Indiana Statewide Certified Development Corporation and First Bank Richmond NA are providing a loan from the U.S. Small Business Administration's 504 program aimed at expanding small businesses. Also involved is the Indianapolis arm of Local Initiatives Support Corporation (LISC), which supports commercial revitalization in urban neighborhoods.
Indiana Statewide CDC works with local lenders to provide SBA 504 loans to owners of small businesses. Small business owners receiving SBA 504 loans can get long-term, fixed rate financing similar to commercial loan terms available for large companies.
"Our interest rate is very, very good," says Nottingham. "The low rate is important to us because we needed to apply as much money as possible on restoring the buildings. These old buildings were structurally sound but we had to catch up with 20 years of maintenance that hadn't been done when they were vacant. We love the location. I live in the neighborhood, and am grateful for the people who are helping us."
The flexibility of the 504 program helped make the deal, says Craig Lichtenberger, vice president of First Bank Richmond for commercial lending. "Older buildings are more challenging than new ones. By using the 504 program, we and the Statewide CDC offered Mark a low, fixed rate that helped him keep more of his money to pay for things such as restoring an original door in the building and returning it to usable condition."
Since Congress created the 504 program , SBA 504 loans have funded over $62 billion to more than 130,000 small businesses. In turn, those small firms have created or retained over 2.1 million jobs for the U.S. economy.
The Indiana Statewide CDC has invested over $400 million in more than 1,000 Indiana companies since 1983, creating or saving 26,500 jobs. Indiana Statewide CDC is the oldest and most prolific CDC in Indiana.
Statewide CDC Executive Director Jean Wojtowicz says, "SBA 504 loans are effective because borrowing companies can put as little as 10 percent down and receive a low, fixed interest rate for as long as 20 years. The SBA guarantees bonds sold privately to finance a portion of the loan. With the guarantee, we can offer loan rates that are more favorable than conventional financing."
Nottingham's project is the latest to go into the Herron-Morton neighborhood; one of Indianapolis' most elegant residential areas in the first third of the Twentieth Century and home to the Indiana State Fairgrounds before 1900. The area is named for John Herron, a benefactor to the Herron School of Art formerly located in the neighborhood and now part of IUPUI, and Oliver Morton, Indiana's governor during the Civil War.
LISC helped Nottingham assemble and clean the property, plus provided New Market Tax Credits to reduce the interest rate. "There were a lot of moving parts in this project," says Wojtowicz. "Many organizations and individuals depend on each other to bring back a property that has been vacant for more than 20 years."
LISC program manager Rachel McIntosh says, "Without the Statewide CDC, this deal would not have happened. This project is a classic example of giving old buildings new purpose." Nottingham's project is one LISC is using to highlight its 20th anniversary of helping neighborhoods in Indianapolis.