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Middletown loan fund

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Vivian Moon View Drop Down
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    Posted: Mar 16 2016 at 7:03am

Posted: 5:15 p.m. Tuesday, March 15, 2016

Middletown loan fund for business redevelopment gets first investor

By Chelsey Levingston

Staff Writer

 

Middletown

Middletown Moving Forward has gained its first investor to create a new loan fund for financing redevelopment efforts in the downtown and airport areas of the city, said Director Calista Smith.

Similar funds in Hamilton and Cincinnati have successfully recruited job-generating businesses and attracted new investment to empty properties.

Duke Energy is committing about $500,000 to the nonprofit Middletown Moving Forward to start the revolving loan fund, said Tim Abbott, government and community relations manager for the utility provider.

“It is in investment into the organization and the Middletown community,” Abbott said. “We feel the timing is right and we’re at a critical crossroads to make sure downtown revitalization is successful.”

After Middletown Moving Forward obtained nonprofit status in 2014, a fundraising effort was launched with the goal of reaching about $5 million total worth of commitments to aid business development efforts in the city.

“Landing our first investor helps bolster our strategy and will help us gain momentum in establishing our fund,” Smith said.

The group is modeling its efforts after other nonprofit economic development agencies such as Hamilton’s CORE Fund, which has raised more than $7.5 million since its launch at the end of 2012; and Cincinnati’s 3CDC which has invested heavily in the city’s Over the Rhine district. All of Hamilton’s spending so far has been on property acquisition, repairs and other costs to restore blighted commercial and residential buildings for sale to private developers. Even though the CORE Fund was started to provide gap loans, it changed strategy to respond to a greater need to help ready vacant buildings for new development, its Director Mike Dingeldein has previously said.

For example, CORE Fund successfully landed call center StarTek Inc. in a downtown Hamilton building it owns on High Street, which promises to create nearly 700 jobs.

Plans for Middletown Moving Forward’s money are to loan it into vetted business projects in the city and for other objectives that fit the nonprofit’s strategy, according to the group and Duke Energy. As developers and other loan recipients pay back the borrowings, the money can be re-invested into other qualified projects.

Typically, gap financing provides lower-interest capital with lengthier payback terms than traditional business loans to applicants that qualify. It’s not meant to be the sole source of financing.

“We are still focused on the gap financing. We also want to try to be more aggressive in attracting a wide variety of quality developers to Middletown,” Smith said.

It will likely be another 18 months to two years before Middletown Moving Forward begins considering and awarding any loan applications, Smith, the group’s director said.

Before it gets to that point, hopes are to raise more funds from more investors, Smith said. However, that doesn’t mean that all $5 million will need raised before loans are made, she said. That amount at which lending can start has not been set. It will also depend on the level of development activity in the city for which additional financing is needed, she said.

“We want to make sure we have a team of investors… so that we can spread the risk,” she said. “The goal is still $5 million but we may able to start some effort at a lower amount.”

Duke Energy sets aside a certain amount of money for economic development activities in its coverage area, Abbott said, who also pointed out this is not the same as a grant. The investment should generate a return for Middletown, he said. Historically, Duke at one time operated a regional headquarters downtown that is now a branch campus of Cincinnati State Middletown.

Middletown Moving Forward eventually expects to create a committee of investors to evaluate loan criteria, which Abbott plans to join, he added.

Nothing is being contemplated by city government at this time to invest in Middletown Moving Forward, said Middletown City Manager Doug Adkins.

 

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acclaro View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote acclaro Quote  Post ReplyReply Direct Link To This Post Posted: Mar 16 2016 at 12:28pm
I have two issues with the Duke participation.

i) Utilities make their profit from a capped % of income, usually, at cost plus 15-20%. Therefore, they are horribly inefficient and have bloated payroll and expense, associated with having high costs, which are then capped at the profit margin %. In this scenario, they are providing capital at the expense of their customers to put into investments that have limited gain. Simply put, the consumer is paying for the investment, as this isn't a separate subsidiary of Duke, but the parent utility company. Duke adds expense in providing such a program, which in turn, allows for a higher net income from the increased costs.

ii) It appears odd, at a time when the city plans to shift the city street light expense as an add on expense to residents, Duke comes with $500,000. Is the city guaranteeing the loan financing under a cloaked understanding. No idea---but what a coincidence. If it takes 2 years for the funds to be released, will Liberty Spirits and others, won't the end result be push back on start date for activity.

Hamilton is so much further along than Middletown in seed funding. How does a laggard 'me too' strategy ever become a success.        
'An appeaser is one who feeds a crocodile, hoping it will eat him last.' - Winston Churchill
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Factguy View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Factguy Quote  Post ReplyReply Direct Link To This Post Posted: Mar 17 2016 at 8:03am
Hamilton has $7.5 M and growing. Middletown will have $500,000 and might grow. Hamilton and Middletown have same demographics. Hamilton is winning. Middletown is losing. But Doug Adkins is a good guy.
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viper771 View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote viper771 Quote  Post ReplyReply Direct Link To This Post Posted: Mar 19 2016 at 11:33pm
All I know is that I am moving out of here in a few mths after 7 years of trying to deal with the ghetto ppl of Middletown. I will be happy to get away from all the nonsense.
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middielover View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote middielover Quote  Post ReplyReply Direct Link To This Post Posted: Mar 20 2016 at 6:11am
Don't let the door hit you in the ass on your way out.

Bye Bye Viper
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VietVet View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote VietVet Quote  Post ReplyReply Direct Link To This Post Posted: Mar 20 2016 at 9:42am
Originally posted by middielover middielover wrote:

Don't let the door hit you in the ass on your way out.

Bye Bye Viper


Wish I could say the same to the Mulligans, Adkins, Picard, Gilleland and all who ruined a once nice city middielover. You got it all wrong. You should be saying this to the side you are always defending on this forum. They are the problem, not the general populace.
I'm so proud of my hometown and what it has become. Recall 'em all. Let's start over.
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spiderjohn View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote spiderjohn Quote  Post ReplyReply Direct Link To This Post Posted: Mar 20 2016 at 11:14am
Come on, vet--show some compassion for middielover
Have to feel for anyone filled with so much bitterness and negativity
The lady is obviously struggling to defend these messes--just look at her continual abusive ad hominem comments
Kinda like defending GW Bush, Obama,Hillary or trump--not much to work with

Most of us know better lol

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FREE!!!!!!!!

And the incredible Punch Brothers tonight at the Taft in Cincinnati !
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viper771 View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote viper771 Quote  Post ReplyReply Direct Link To This Post Posted: Mar 20 2016 at 10:21pm
Seriously Middielover? I was one of the biggest supporters of the downtown. I even worked in the downtown for 2 years. You get tired of dealing with hookers and drug addicts...  Esp when you end you having trash as your neighbors. My wife and I are the only ones on our block, if not the street, that work. If things change, it will take 50 years. I highly doubt AK will be around another 20. Once AK goes, this town will be in way worse shape than it is now. 

I think the efforts are great, but honestly nobody with any value will want to come to Middletown as long as there is an abundance of Section 8. Who wants to live around ppl like that, or even raise a family? My wife and I did our best to fix our area of town, but we ended up just becoming targets to the lowlifes.. I don't want to waste anymore time or put my wife in danger any longer for this city. It just isn't worth it when you can have something better an hour away.
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middielover View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote middielover Quote  Post ReplyReply Direct Link To This Post Posted: Mar 22 2016 at 2:58am
Viper

If you want out that is your choice but why throw stones on your way out?
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