The Louisville Downtown Development Corporation introduces:

The Downtown Commercial Loan Fund

Supporting New Job Growth
Louisville investing in Louisville
Louisville impacting Louisville
Louisville growing Louisville

 
The Downtown Louisville Commercial Loan Fund (DLCF) is a new economic development tool that is intended to stimulate commercial development by providing gap financing. Its targeted recipients are real estate developers investing in projects to promote job growth and other positive economic development in Downtown. This funding is intended to be attractive secondary financing assistance, with below-market interest rates and fees and the potential for more flexible payment terms than primary financing.

The fund is most interested in projects that accomplish:

• Adaptive Reuse/historic preservation
• Infill development
• Mixed use, quality urban design projects with retail on the ground floor
• Are developed in targeted high priority areas (including areas around the Medical Center, the Arena, Slugger Field, 4th Street, the Museum   District, the Broadway/Education district
• New, permanent job creation with impacts to key downtown industry clusters
• Energy efficiency and sustainability

Louisville Investing in Louisville

The new arena has brought a new spirit of investment Downtown.  The Louisville Downtown Development Corporation (LDDC) has raised about $4.5 million to help stimulate more private commercial investment and development in Downtown.




The DCLF will leverage primary financing to help generate additional job growth in Louisville.


The Downtown Commercial Loan Fund has eight direct investors:

• PNC
• Fifth Third Bank
• Louisville Downtown Development Corporation
• Old National Bank
• LG&E – KU Capital LLC
• Stock Yards Bank
• Central Bank
• Republic Bank
  

The fund also has an Affiliation Agreement with Metro Bank that provides a targeted pool of loan funding in conjunction with the Commercial Loan Fund.

The Louisville Downtown Development Corporation manages the Fund, and a Loan committee --comprised of the investors -- makes lending decisions.

Louisville Impacting Louisville

The fund is expected to be beneficial to Louisville in many ways.  It is innovative, yet tested, model that has been successful in other communities in the commercial development real estate field.

• A key source of capital to leverage lending institution investments
• Capital to close funding gaps and allow projects to proceed
• Loan proceeds revolve and are reinvested in additional projects
• A Loan Review Committee, comprised of investors, makes investment decisions
• A Primary lender is required for loan consideration
• Competitive interest return
• Experienced fund management
  

These types of projects LDDC expect to fund through the DCLF include office/retail development in Downtown that feature adaptive reuse, infill, and mixed use.  It will also fill a hole in the existing lending mechanism, as the Housing Fund can’t effectively be used to fund non-housing elements of mixed-use projects.

• Loan Applications are submitted to LDDC with all supporting documentation
• After LDDC staff review, the Loan Review Committee will review the application, only when all materials are complete
• Maximum Fund participation through the regular approval process is up to $250,000. Loans can be above $250,000 with a super majority vote of the Loan Review Committee
• The Fund will not finance more than a primary lender
• All primary lender documentation must be provided to the Loan Review Committee prior to action by the Fund
• A primary lender approval must be received on the project prior to Fund consideration or contingent approval is possible subject to primary lender approval.  The Fund will not close until primary lending has been approved
• The Commercial Loan Fund can take a secondary position
• Loan amortization periods and interest rates will depend on policy points given to each project by LDDC staff and credit review applied by the Loan Review Committee.  The Loan Review Committee will have final say on all terms
• The Loan Review Committee will determine credit risk and final proposed terms
• Loans to borrowers will not exceed 10 years in length, unless the primary lender has approved a longer term, in which case the Fund may consider a longer term
  

Requirements Include:

• All loans will be fully collateralized
• All loans must have personal guarantees, unless waived by the Loan Review Committee
• Even if the highest score for policy points is obtained, a loan request may be rejected based on a credit review of the project  by the Loan Review Committee
• Borrower pays Fund for closing cost fees
• Interest charged to borrower is determined by the Loan Review Committee based on Credit Review and Policy Score
• The DCLF will invest in Loans that qualify under the Community Reinvestment Act
  

Louisville Growing Louisville

DCLF’s purpose is to allow Louisville to expand its competitive standing by offering permanent gap financing for real estate projects.  The projects, and their resulting job growth, will mean positive results for our community.  New commercial development is key to an expanded economy.

• Promotes employment
• Encourages historic renovation, sustainability/green development and adaptive reuse of Class B office space
• Unleashes entrepreneurs, developers, small business owners, angle investors and business leaders throughout the community
• Keeps Louisville competitive with its surrounding communities and Downtown
• Generate new tax revenue to the City and State
  

The Fund is expected to leverage $145 million in private investment, and to create approximately 3,000 new jobs in Louisville.

The Downtown Commercial Development Fund

A local-driven investment fund that provides mezzanine and gap financing to grow commercial development in the heart of the city and region

 
The only thing standing between Downtown and its future isn’t just a new bridge.  It’s also bridge loans, construction loans, business loans…..and your investment.

Click below for filing forms

Loan Application