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SPRINGFIELD

DEVELOPERS GUIDE

WRITTEN & PUBLISHED BY

Downtown Springfield, Inc.


PRESENTED BY

Commercial Real Estate Network

INTRODUCTION
Springfield is the heart of Illinois. That is what the Long Nine envisioned, Abraham Lincoln among them, in 1839 when the capital moved to Springfield from Vandalia. The core of that vision was to create a community that would serve as a shining beacon of government, commerce and community that would make Springfield the best capital city in America. Development has proceeded from that dusty or muddy (depending on current weather conditions) dot on the prairie landscape, into a community that has, in many ways, lived up to the Long Nine vision of a shining capital city. The coal mining and manufacturing that dominated the better part of the first 150 years of community history have laid the backbone and groundwork for the 21st Century Springfield. Development has proceeded from the 19th Century core to envelop larger expanses of Sangamon County within the expanded city limits. A renewed interest in historic preservation and development at the core of the city; including adaptive re-use of existing 19th and early 20th Century structures has set the stage for development in the central city. The advent of the Mid-Illinois Medical District at Springfield will enable the community to maximize its potential as a regional health care and medical research giant in the industry. Development in other parts of the community will assist the ever burgeoning population with its needs for goods and services necessary to sustain a healthy and growing regional economy. The publication you are now beginning to read will assist you in your quest to help Springfield develop and thrive.

TABLE OF CONTENTS
Chapter 1: PREPARATION .............................. 5

Chapter 2: PROFESSIONAL ASSISTANCE ................. 11 Chapter 3: FINANCIALS .......................................19 Chapter 4: SITE SEARCH & SELECTION.................... 23 Chapter 5: CODES & REGULATIONS ....................... 27 Chapter 6: FUNDING PROGRAMS .......................... 31 Chapter 7: TIMELINES ...................................... 41 Chapter 8: MARKETING & PR .............................. 47 Chapter 9: ADMONITIONS & OPPORTUNITIES ............ 51 Chapter 10: TOP TEN LESSONS .............................. 55 Chapter 11: COMMERCIAL REAL ESTATE NETWORK......57 DIRECTORY: REALTORS ...................................... 59

CHAPTER ONE So you want to be an urban pioneer?

PREPARATION

So you loved the ambiance downtown during dinner and the show at the Hooglan Center you saw last week? Perhaps you even envied those who were able to walk home just a few blocks from the Summer Serenade concerts last year or you havent missed a First Night since they began. Maybe you love taking your family to a day at Knights Action Park followed by a drive-in movie but thought a restaurant would go great over here or you love getting all your fresh vegertables at the Farmers Market but think a year round market would be ideal. Perhaps you attend most of your neighborhood mixers and fundraisers and want to help your community grow or find yourself driving by an old hot spot and say to yourself Someone should do something with that place. Whatever draws you to becoming an urban pioneer, this guide is for you. There are any number of interesting buildings only blocks away from all the action. You may have the kernel of a plan for renovation and an idea of just the right business or residential opportunity or both but need help. Here are eight key issues you will want to consider before you commit your time, money and talent to the project: Motivation What is the primary goal what makes you want to be part of the growth of Springfield? Inconveniences? Love of the community? Are you an amateur historian? Or are you motivated by making money? Each of these dreams brings with them sobering realities. An honest self-appraisal is the foundation for creating a successful project. The reason you are interested is the most basic building

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block for success of your project. If your primary goal is making money, you may need to wait for someone to give you a building! The cost of developing or renovation and the expense of professional help may put any other property out of reach. If your focus is historical restoration, you need to make sure you have substantial resources available. The rearch, materials and labor costs of accurate restoration will stretch every project budget. There should be no illusion that you will recover your restoration costs dollar for dollar. Are you doing the project alone or with one or more partners? More hands, diverse skills and pocketbooks can transform a dream into reality. Whatever your motivation, you will find that spreading the financial risk and sharing the responsibilities of development can help secure your goals. Building Use Do you plan residential, commercial, industrial or mixed use? What is the current zoning on your building? . Have you talked to your Alderman, lawyer or City official about changing zoning? Or applied for a planned mixed-use development? How about the use of the building over the years? Beyond the environmental assessment required by lenders, has this building ever housed a business that used hazardous products? You will need to resolve any questions about the building history and the viability of your future plans before moving ahead with the purchase of the site. Project Goal Is the purchase for owner occupancy, resale, condo or rental. If you plan to occupy the building yourself, this may well affect your eligibility for: Historic Tax Credits (HTC), City funding, the legal structure of ownership, and private lending! The State of Illinois does not have a program to underwrite HTC for residential projects. You will not be able to own the building outright, at least until the 5-year LLC (Limited Liability Company) with your equity partner

A number of buildings in the downtown area are zoned R3 or R-4, which allow housing over the storefront (retail or commercial business)

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expires. Further, the City is not in the business of funding private housing units, particularly when public tax funds are involved. You must demonstrate public benefit from the project and you would be wise to have other commercial or residential tenants who will also share in the improvements. On the other hand, private lenders may be willing to look at the project as a residential rather than commercial project, requiring less equity investment up front because the building owners do not demand the same Return on Investment or Return on Equity required in a standard commercial transaction. Each project carries with it unique considerations, whether it will be owner-occupied, or comprised of units for rent or resale. Funds from various public and private sources carry with them explicit or implicit stipulations that will impact your project. Your ability to change the destiny of your project during the period of involvement of the funding source will be limited by those restrictions. You will need to weigh and balance all these considerations before embarking on a final course. Financials What resources do you bring to the table? Are you young, ambitious and idealistic with lots of energy and some construction skills? Or are you a grizzled veteran of the work world with a sizeable retirement nest egg that you want to protect? How much money are you willing to commit to a project? Do lenders value in-kind contributions of labor (sweat equity)? Is it possible to undertake a development project without a substantial bankroll? Not likely but NEVER say never! Returns Prospective investors evaluate projects based on ROI (return on investment) and ROE (return on equity). Before we begin, here are two definitions: 1) leveraged is with debt, and 2) unleveraged is without debt. The return on investment is typically an unleveraged investment return analysis. The market for the unleveraged return (ROI) is determined by the rate of return required by institutional investors paying 100% cash for a fully-stabilized development and then adjusting for both construction and stabilization risk.

There are existing projects around town that did not require the next born child as collateral. However, it should be said that most financial advisors and others experienced in development caution that lenders do not view your labors as comparable to dollars invested. In general, for them to risk their capital, they need to know that the owners have done the same.

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The return on equity is a fully-leveraged return on investor equity return analysis. The two benchmarks of return are determined by the current market for institutional money invested in various types of real estate projects, adjusted for the risk on the specific project. The market for this benchmark is also determined by the rate of return required by institutional investors. However, it is the institutional investors that will contribute real development equity to a project. The most common difference between mezzanine funding and equity is that the mezzanine source is ahead of the true equity in terms of payout and profit distributions. Generally, the order of payoff is senior debt, mezzanine funding source and then the equity investor. The current market for true equity is 20-25% and 18% for a mezzanine funding source. These benchmarks are adjusted for each project subject to negotiation and may vary a little. For example, it is not uncommon for an equity source to require 35 40% for a moderately more risky project. Team Structure You may want to seek professional advice in determining the most appropriate form of organization for your endeavor. Even after start-up, you may wish to modify your legal structure due to changes in tax laws or your own fluctuating need for capital. The nature of the loans on your development project will also impact your review. It is important to weigh all advantages and disadvantages of the various business forms so that you do not decide on a business structure solely because of tax implications. Key forms are: Sole Proprietorship This is generally the least expensive and simplest to form. You and the business are the same entity. While you assume all debt responsibility, you also reap all profits (and pay taxes on your individual income tax return). Financial capital may be less accessible to the owner. Partnership This is defined as an association of two or more persons acting as co-owners of a business for profit. Each partner contributes money, property, labor or skill. A partnership may be general or limited, with

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a key distinction being the limitation of liability for limited partners who are liable only for the amount of their equity investment. In Illinois, all partnerships must have at least one general partner. Limited Liability Company An LLC is a relatively new form of business organization created by statute in Illinois. It provides its owners with limited liability, flow-through tax treatment and operating flexibility by allowing participation in management of the business. An LLC is formed by filing articles of organization with the Secretary of State and paying the required filing fee and annual renewals. Members may elect to have interests in an LLC just as partners in a partnership. An LLC does not issue shares of stock but is required to file annual reports. All members can manage the business or elect one or more managers to run the business. An LLC is required to adopt an Operating Agreement, which provides operational details as well as how the members relate to each other. Legal counsel and tax advice should be sought before setting up an LLC. C-Corp or S-Corp A corporation is legally a separate entity from the individuals who own and operate it. It is the most complex form of business organization with shareholders as owners and limited liability in regard to the corporation. The shareholders elect a board of directors who in turn elect the president who operates the business. The corporate limited liability, however, does not extend to officers, who can be held personally liable for all unpaid federal taxes, including withholding taxes for employees. The distinction between C and S-Corporations pertains to taxation and the percentage of revenues from passive income. It is highly recommended that you consult with an attorney to discuss the advantages, disadvantages, regulations and requirements of Cand S Corporations.

Every corporation must register with the Illinois Secretary of State by filing Articles of Incorporation. Only corporations may and must use Corporation, Corp., Inc. or Incorporated in their business titles. They must file annual reports with the Secretary of State. The State also tracks name availability for corporations only.

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CHAPTER TWO

PROFESSIONAL ASSISTANCE

Is There a Doctor in the House?

It goes without saying that the more you can do yourself, the less need you will have for experts. For example, if you have strong accounting skills, you may be able to create much of the financial model yourself. Or you may be able to save some architectural fees if youre facile with a drafting program. (You still must have signed drawings from an architect for mixed use rehabs.) Perhaps your renovation is limited and can be handled by an experienced general contractor and does not require an architect. Maybe there is a lawyer in the family who will consult at no charge or an experienced developer who will assist along the way. But no matter how facile and experienced you are, you will require some professional support for your project. These professional fees are often included in the project budget under the heading of soft costs. Here is a list of experts you may need to hire: Attorney Fees: range of $2,000 $10,000. The litigious nature of the American society is a given. To protect yourself, your partners and heirs, legal advice is a must on your building project. Actually, there are four areas of your enterprise that may require an attorney: Property acquisition: legal research prior to the offer; survey and land description; negotiations and closing. Partnership or incorporation: if you decide not to work alone, you need help to research and execute partnership or papers of incorporation. Tenant leases and contracts. Historic tax credits: Even an experienced real estate attorney may not have the expertise to deal with the intricacies of this special form of real estate syndication. Shop for an expert who has

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If you are looking for public support, you will want to identify and engage an expert with the arcane language and rules that pertain to the specific resources you seek.

both the experience and the contacts with lending institutions who are in the business of buying these credits. They will obtain the top price for the resale of credits and help you negotiate the complex legal and tax issues that can impact your project and your personal tax status. You can get more information on available Historic Tax Credits from the Illinois Historic Preservation Agency. Financial Real Estate Advisor Fees: range of $5,000 - $60,000 but may vary according to the nature and scope of the work. Most of us are not financial wizards or experts at the language or form of a qualified financial real estate advisor. There are a number of financial reports required to evaluate and apply for public and private funding in support of your project. The majority may be outside your experience and several far outside your comfort zone! Even if the forms are not daunting, the specifics of real estate syndication and government funding will begin to sound like a foreign language. You will want a translator. If you are looking for public support, you will want to identify and engage an expert with the arcane language and rules that pertain to the specific resources you seek. Included in this advisors area of expertise: Project budget: You may be comfortable with the budget process at work, preparing a preliminary budget for your building site after visits and discussions with your architect, developer, contractor and real estate advisor. (See Chapter 3 for more details) Working (operating) budget: Projected and actual expenses are often very different. While you will have allowed some room for surprises in the project budget (usually 10 20% of all other expenses and titled change order allowance or contingencies), you will also want to track the real

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costs. (See Chapter 3 for more details) Construction loan: You will likely need help with a construction phase loan, requiring requests for payment to the vendors. These requests can be handled for a modest fee by a title company. (See Chapter 3 for more details) Standard Real Estate Analysis: This is an important aspect of development and one where the non professional can lose a grip on reality. It includes an amortization schedule (showing your expected mortgage balance and payments over the term of the loan to a final balance of zero), which allows you and prospective investors to evaluate the wisdom of the investment. Will you be upside down in your investment if you need to sell in the near future? It also includes the Return on Investment and Return on Equity that serve as the basis For the Gap Analysis below. These tools allow the owner, team and prospective investors to evaluate the project. (See Chapter 6 for more details) Gap Analysis: When you intend to request government funding, the project must meet the needs of investors and also conventional city expectations. The gap analysis evaluates the project with and without government assistance over a reasonable period of projection, in many cases 10 years. It includes an estimated fair market value for the project upon completion. (See Chapter 6 for more details) Other funding requirements: Because TIF (see explanation in Chapter 6) is self-funding, it involves either property tax rebated (similar to an abated tax) or rising tax revenues to cover an initial cash investment up-front. Therefore, tax increment projects need to be prepared for submission to the City. In addition, your real estate advisor may provide strategies and/or coaching for visits or participate in actual presentations and negotiations with the City or other funding sources. Accountant Fees: vary according to the nature and extent of the work provided. A word of caution: you should keep your own tax and financial planning separate from the project. Your personal

Because TIF is selffunding, it involves either property tax rebated (similar to an abated tax) or rising tax revenues to cover an initial cash investment up-front. Therefore, tax increment projects need to be prepared for submission to the City. In addition, your real estate advisor may provide strategies and/or coaching for visits or participate in actual presentations and negotiations with the City or other funding sources.

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Some projects will require only minor design. These could include buildings that have been restored by a previous owner or buildings of fairly recent vintage. You may still want to pay an architect to participate in early inspections and advise on codes. You want to make sure your project is viable (structurally as well as financially) and that there are no code violations that could prove a deal-breaker. If you have a major renovation project in mind, dont ever assume you can do this without a pro!

accountant will provide advice on tax consequences, investments, and impact on retirement. You may end up paying both advisors for a consultation if your project involves complex funding or tax issues Architect Fees: between 7-13% of the project Before you hire, make sure you are clear on the nature of the project and your financial goals and capacity. You may want to ask the architect you select to conduct a walkthrough inspection with you and assist with evaluation and appraisal of possible sites. If you are tackling an older building, particularly one with historic status, you will need an experienced hand to navigate through the applications for historic status and Tax Credits (Part 1, 2, and 3). More important, your architect should have experience working on restoration projects in older buildings. After a number of consultations, he/she will provide renderings (useful for presentations and marketing efforts) and final architectural drawings (needed to obtain bids from sub-contractors, create a final project budget, and for the use of the City Building Department for plan review prior to issuing a building permit). Working with the general contractor, your architect will research unfamiliar local, state and federal codes applicable to your building and should be available to help with negotiations on these matters. It is in your best interest that he/she have a good working relationship with local officials to assist with meetings on City funds. The architect will hire a structural engineering firm if one is needed to help create plans to address structural problems. If experienced with historic building projects, he/she may shepherd your project through the application process for the Historic Tax Credit, including negotiations with state and federal officials responsible to give the thumbs up to funding. Some projects will require only minor design. These could include buildings that have been restored by a previous owner or buildings of fairly recent vintage. You may still want to pay an architect to participate in early inspections and advise on codes. You want to make sure your project is viable (structurally as well as financially) and that there are no code violations that could prove a deal-breaker. If you have a major renovation project in mind, dont ever assume you can do this without a pro!

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Developer Fees: 4 15% of the construction cost of the project

The developer is active from the beginning to the end of the project, starting with research and site selection. The primary goal of a developer is to put the deal together from the construction to the financing of the project. Developers are also instrumental in research and negotiation on local, state and federal regulations, although the architect and contractor can help educate the owner/developer. Other responsibilities: timeline, budget preparations and financials, and hiring of the contractor, who hires the subcontractors and oversees the actual construction phase. Many urban pioneers choose to act as their own developers. Often a project in downtown Springfield is not affordable with the hiring of a developer, contractor and other professionals.
General Contractor (GC) Fees: 8 15% of the hard construction costs of the project. This position is another area where urban pioneers attempt to save money. Unless you have experience with the construction process and possess substantial business management experience and strong organizational skills, serving as your own contractor is a little like representing yourself in court: you may have a fool for a client! You should consult with an experienced contractor and then proceed at your own peril! Assuming you employ an experienced professional, make sure the contractor has a license and insurance, with both liability and workers compensation. Expect the contractor to obtain appropriate permits as the job progresses. If the GC is not going to work with you on budget preparation and the project time, he/she should be expected to review these documents. Another task

Architects report that the major sources of conflict with clients are: 1) schedule overruns; 2) escalating costs; and 3) performance issues. Responsible parties for these problems may include the contractor (and the subs), the architect, the developer, and even the client! The best way to reduce problems is strong planning, clear contracts/agreements, and preparation for contingencies (change orders).

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before beginning construction is thorough research and negotiations on local, state and federal regulations. On these issues the contractor should work closely with your architect and the appropriate government agencies. Expect the GC to hire and schedule sub-contractors. He/she should be expected to be on-site to supervise their project sub-contractors (subs) and employees (often rough and finish carpenters or general laborers for demolition). Contractors are also responsible to hold subs accountable for the quality of their work and completion on time. Contractors should apply for building permits in their own names, leaving you free of liability. Approvals come at the end of the permitting process and are usually required for the electric, heating, and plumbing work, among other things. Make sure your contractor arranges for the required inspections when work is completed and hold him responsible for those required by the code authority. Architects report that the major sources of conflict with clients are: 1) schedule overruns; 2) escalating costs; and 3) performance issues. Responsible parties for these problems may include the contractor (and the subs), the architect, the developer, and even the client! The best way to reduce problems is strong planning, clear contracts/agreements, and preparation for contingencies (change orders). Real Estate Appraiser Fees: $1000 - $3,000. Often required to obtain a mortgage, this inspection is recommended for peace of mind of the purchaser as well. The bank will want to use an appraiser of their own choosing. Banker Fees: negotiable. Four phases of the project may require funding from a lender: 1) the origination mortgage at the time of purchase 2) a construction loan (or line of credit) 3) a consolidated mortgage (combining the principal/

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interest from the construction loan with the origination mortgage), 4) equity partnership for Historic Tax Credits. You will want to talk to at least three lending institutions before committing for each phase. You may want to consider some or all of the following: Do you have a longstanding banking relationship? Does your bank specialize in any of these types of businesses? Are you comfortable dealing with a large bank domiciled out of state or do you prefer local lenders? Who does your developer, contractor, architect or accountant recommend, particularly for the equity partnership on the Historic Tax Credits? City Alderman Fees: none. This may seem a strange addition to the list of experts on your project. But whatever you are planning to do with your building, the City is interested! Chances are that City Council members representing downtown wards know a great deal about city requirements and the latest available funding. They are aware of various codes and restrictions, and which City department handles which kind of requests. They may act as ombudsman for you in meetings with City officials. If they are familiar with your project, they will likely advocate for you on the floor of City Council when the time comes for a vote on funding for your project. They may also provide invaluable networking assistance. You could not afford to pay for the expertise and quiet support they will bring to your project!

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CHAPTER THREE

FINANCIALS

Help with financial information is typically needed from an accountant, attorney or bookkeeper for development projects. Here are some basics every would-be owner/ developer needs to know.

Property Appraisal and County Assessment


There are several ways to evaluate your property. A simple way to get an idea of the property value for no cost is to call or stop by the Sangamon County Assessors office (phone # 7536725). You can also access their website at www.co.sangamon. il.us They can provide a fair market value for the property. The City will likely require a figure from the County assessor if TIF funding is under consideration (see Chapter 6). However, in many cases the Countys fair market value will be conservative. Real estate agents are another source for property evaluation. Many are familiar with the real estate market and will provide a written report on value. Environmental You will want to make sure the property being considered is free of environmental issues such as ground contamination from petroleum products, asbestos and lead based paints. You will want to consider the past uses of the property, the age of any existing structures as well as adjacent sites that could have an environmental impact on your property. At the very least, the bank will do an environmental questionnaire to determine environmental risk. Properties with potential risk or larger projects will normally trigger an environmental assessment provided by a professional environmental firm.

The best way to arrive at a property value is with an appraisal done by a paid professional. Banks will usually make this a requirement. The cost will typically run $1,000 - $3,000, depending on the size and value of your building. This figure will help determine the amount the bank will loan you and what kind of equity and/or gap financing may be needed.

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Another requirement of a sound business plan for construction, rehabilitation, restoration or renovation is a project budget. You can get assistance in completing this from your architect and/or general contractor. There are sample budgets included in the appendix of this manual.

A property with undetected environmental issues can cause significant problems for the owner in regard to cleanup and liability. Plans, Specs On any construction, rehab, restoration or renovation project, a set of plans showing foundation, floor plan for all levels and exterior views for all sides of the property is needed. In addition, a description of materials, or specifications, is needed.

Project Budget and Working Budget


Key items include SOFT COSTS: legal fees; carrying costs (interest during construction loan); architectural and accounting fees; general contractor and developers fees; and HARD COSTS: excavating and grading; foundations; concrete flatwork; well and septic; roof; masonry; heating, cooling and ventilation (HVAC); plumbing (including fixtures) and electrical (including fixtures); carpentry, plastering, painting, insulation; fireplaces and elevators; gutters and downspouts; landscaping; building permits; driveway and parking lot; millwork (cabinets and countertops); windows and doors; siding; structural steel and wood support beams; apartment appliances and storage systems. Often overlooked in the initial budget preparation: Water, sewer and sprinkler hook-up to City supply Legal fees for incorporation or condo conversion (associated with Historic Tax Credits) Elevator shaft and machine room work including crane rental Hot water heater and water softener Builders risk insurance Renovations or equipment such as HVAC for existing tenant space Exterior storefront or decorative finishing touches, curb cuts for garage access, security systems Surveys and appraisals Exterior sidewalk Driveway or parking lot expenses Carrying costs or interest on the construction loan if the project takes longer than planned One critical expense line is contingencies, or change order allowance. No matter how thoroughly you research your project and how many quotes you obtain, it is guaranteed that you will discover unforeseen expenses as the project progresses.

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It is rare that a project does not end up costing more than budgeted. A contingency for 20% of the project is not uncommon.

Operating Budget and Cash Flow


Any investor or loan institution will want to be sure that the project is viable after it is completed. So the next step in a plan is to create an operating budget and cash flow projections. These projections will include income and expenses generated by the project once it is up and running. It is important that the project produces adequate cash flow to cover all expenses including debt service. Escrow It is recommended to set aside a pre-determined amount each month for real estate taxes, insurance and major maintenance projects (roof, parking lot resurfacing, exterior paint, sky light maintenance, masonry, etc.). If the project is financed, the bank may require an escrow payment each month for taxes and insurance as part of the regular loan payment. This escrow payment is put in an escrow account and accumulates so there will be adequate funds available when the taxes and insurance are due.

After your initial project budget is complete, you will want to create a working budget that reflects actual bids from subs in such a way that you can look at how far over/under budget you are on a particular line item. If you are over budget, you will have to decide whether you should: 1) obtain additional bids; 2) revise the project; or 3) go back to your sub-contractors for value engineering, to reduce the amount of their bid. For example, if you are renovating an old building and using Historic Tax Credits, you may get a bid to manufacture all new windows. If these come in far over budget, you can choose to divide up the work between various subcontractors and do some of the work yourself to save money.

Equity
Banks will rarely finance 100% of the cost of a project. As a general rule, banks finance 80% of a project. That means the remaining 20% must come from funds outside the bank. Even with gap financing and other programs available, lenders will typically want some cash equity provided by the borrower. Banks like to be at 80% of cost or appraisal value whichever is less. Also, banks may require additional equity in more risky projects.

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Construction Loan
Unless you plan to bankroll the project from start to finish, you will need a construction loan. This is a short term (usually 6 months to 1 year depending on the size of the project), adjustable-rate loan (up to a maximum amount determined by the estimated cost, future property value, and/or appraisal) that is issued in disbursements or progress draws on a predetermined basis (usually once or twice a month). Construction loans are typically monthly interest only payments on the outstanding balance during the actual construction phase with permanent financing set

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up with monthly principal and interest payments once the project is complete. Project payments from the construction loan are typically done by the bank or a title company as bills are received. When a check goes out for payment, a lien waiver is sent to be signed and returned to the bank/title company.

Financing
New condominium projects may be eligible for secondary market (conventional) mortgage financing. Banks look at each loan on a case-by-case basis to determine borrower qualifications. Most banks will consider a one, three or five-year balloon or Adjustable Rate Mortgage (ARM) financing in lieu of secondary market eligible loans. Once the condominium does become eligible, the full array of ARMs and fixed rate loans (15, 20 or 30-year amortization) becomes available. For some residential projects, 30-, 20-, and 15-year fixed rate loan programs are available as well as ARM programs (1-, 3-and 5-year). Commercial properties are typically written over a 15 to 20 year amortization with a balloon and a rate fixed for 5 years. For more details on commercial options, see Chapter 6 Bank Programs.

Financial Information
In addition to information on the project, your lender will want personal financial information on each owner of the project as each owner will typically be personally obligated on the debt. Information needed will include a personal financial statement (banks have these forms) and personal tax returns for the past 3 years. A credit report is usually run on each individual to help determine credit risk. If the owner of the project is going to be an existing business, th lender will want business returns and financial statements for the past 3 years in addition to presonal financial information for the business owners as noted above.

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The local Commercial Real Estate Network is also a great asset. Other sources are real Site Searching for the Perfect estate listings online

CHAPTER FOUR

SITE SEARCH & SELECTION

Site Search by specific firms. These can There is nothing magical about your search. It can be as be reinforced or expanded simple as several by watching the afternoons newspaperof driving or biking around for tidbits about Assuming Springfield an interest in downtown desired districts. businesses and building owners development, a good resource is the office and membership that might produce available of Downtown Springfield Inc. (DSI). They sponsor space. numerous events to provide networking opportunities, such as the annual awards banquet, architectural tours and assorted social activities. In the past three years, DSI has co-sponsored or sponsored multiple informational seminars and educational events. A second approach is to create your own inventory of potential properties using the DSI list, which is available from the DSI office or any commercial realtor. Networking should begin with community leaders such as the aldermen and employees of the local Department of Community Development, and arc out to your own sphere (business associates, friends and neighbors interested in the downtown) and beyond to owners and tenants in your target areas. Do not forget realtors whose firms list commercial properties: they will have a handle on the latest confirmed and unconfirmed listings. If you plan to operate a business within your building, you will want to contact the Springfield Area Economic Development Council (525-1173) and the City of Springfield Community Development Department (789-2377). These bodies are willing and able to assist new and expanding companies

and publications or supplements

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to locate vacant facilities or available land that meets their needs. The SpringfieldAnother Area Economic important Development reality check Council maintains a database of available commercial sites. is the brutally honest evaluations The Regional Planning Commission and the City Council of your professional advisors. A developer, architect or appraiser have prepared a comprehensive Land Use plan that also will help you evaluate the viability provides detailed information about vacant or underutilized of the building. A three inch parcels for future development.

Site Selection

style is stunning but it is located in an area that is in transition. The other is half the size and perfect for 2 residential units; it was renovated some years ago and has a residential tenant who has been in the upper for 3 years. This second building is located on a major arterial street downtown.

slope to a floor can be erased, if you commit enough resources to make repairs. While a vacant building appears to be a real Letsit may assume you steal, be located h a v e n a r r o w ed in an area requiring environmental your search cleanto two up. Your bargain buildings. Onemay is a become a budget commercial structure b ster! Y o u wfeet ill ofu10,000 square also want to show that has been vacant the budget to your for 25 years; the basic accountant and review structure is sound the plan with your and the advisor. architectural financial

You have done some cursory research using available data bases. You managed to find a previous owner of the first building and the realtor who sold the second property to the previous owners who restored the upper flat. Youre excited by your finds and want to get moving before someone else discovers these gems. Nows the time to begin some serious evaluations. The first step is to create rough budgets for each building. These should include the project costs to help determine the size of the mortgage and your own obligation. From that a traditional real estate evaluation will provide your return on investment and equity. Beyond the project budget you should also create an operating budget that will include escrow funds for

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major repairs, standard operating costs (insurance, utility, taxes at the new property value) and reasonable revenue based on comparable rents or sale prices in the area. There are various people available through DSI to assist with all of the above required steps. You will need to review carefully the tax implications of this purchase. Your attorney should review any current lease or contracts related to the building. And check for problems with zoning restrictions. Other initial legal concerns include: street address, parking issues, and team legal status (sole proprietor, partnership, LLC or incorporation). Considerations prior to closing are bank and other closing fees, and utility bills. It is always a good idea to request a copy of your sellers closing documents prior to the closing itself. They may contain such nuggets as final utility bills or other expenses that will provide vital information to you. A major portion of the downtown area is a Tax Increment Financing (TIF) District, which provides for substantial incentives for redevelopment as well as for certain types of tenants looking in the downtown area. Other parts of the city also have TIF districts designated and the benefits of these districts can be substantial. Enterprise zones are designated for several areas of the city also. These can also be the areas of a TIF district. These zones provide additional incentives.

Purchase
Unless you are an experienced developer, you will want help from an attorney in negotiating the purchase price and terms. The closing will involve the following parties: buyer, seller, their respective attorneys, a loan officer from the lending institution and a title company official. For your part, closing costs may include environmental study, real estate appraisal, bank fees, and tax escrow. On the other hand, the seller may be responsible for tax escrow, final utility bills, rent reimbursement (covering tenants advance payments beyond the date of the sale).

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Resources
SPRINGFIELD PUBLIC LIBRARY- SANGAMON VALLEY COLLECTION These records contain the most comprehensive collection of historic photographs of the historic downtown area and other areas of the city.

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STATE JOURNAL REGISTER The archives of the State Journal Register and their microfilm department contain substantial information about properties in Springfield. ILES HOUSE FOUNDATION This is a museum of Springfield history that contains significant data about Springfields past. HISTORIC SITES COMMISSION As part of the City Department of Economic Development this commission also maintains a collection of historic information on the development of Springfield. ILLINOIS HISTORIC PRESERVATION AGENCY The archives of this agency contain data regarding the Historic American Building Surveys as well as data on the Historic American engineering Records for properties in the city. OTHER SOURCES There are several other sources available which can add information to a search for property history. These include city directories, title searches for property ownership, census records for information on previous records, tax records and other public records related to the ownership and development of property.

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CHAPTER FIVE
Play the Game

CODES & REGULATIONS

CASE STUDY
The historic Pasfield Building was expanded with an addition on a previously demolished infill site. The new two-story building compliments the three story 1880s structure. A new central foyer connects historic and new building areas on the first floor, The brick and limestone facade of the new addition matches texture, detail and scale of the

The Difference Between Commercial and Residential or Mixed Use Expectations There are different requirements that apply to residential and commercial space. Two specific areas include fire codes egress and sprinkler requirements. Buildings that are single-family or two-family residential have fewer code requirements than do commercial properties. When residential and commercial uses are located in one building, however, the residential generally rises to the level of the commercial space. If you plan to use the building for something other than the prior standard use (for example, residential or mixed use in a formerly all-commercial building), you will want to check on the impact of that alteration. Dont make assumptions about which codes apply; check with the experts at City Hall! Stay in contact with the Plans Examiners in the Building Department and they will guide you and your design team to work through any problems.

Specific Regulations
Federal Employer Identification Number/FEIN (IRS) The FEIN is required of all partnerships, limited liability companies, C-corporations and S-corporations for taxpayer identification. The state of Illinois accepts the FEIN issued by the Internal Revenue Service for Illinois tax forms. If you change from a sole proprietorship to a partnership or corporation, you must request a new FEIN. To apply, use form SS-4 Application for Employer Identification Number. The form is available at the local IRS office or on the Internet at www.irs.gov/forms. Send the completed form to the specified IRS office. Sole proprietors can use their Social Security number as their business taxpayer number.

Pasfield Building. The previously enclosed and modernized Pasfield storefront was replaced with a more historically accurate faade, including a replica of the original small metal cornice at the second floor level. The project owner and the A/E team worked closely with the City from the start of the project. This was the first new office building in the central Historic District in many years. Some of the issues that had to be resolved included a careful review of the connections between historic and new buildings.

Zoning Regulations
(City of Springfield, Department of Building & Zoning, 7892171, Third Floor, Municipal Center West) Springfield has zoning ordinances that regulate what type of tenants (industrial, commercial, residential) can occupy a building. The districts allow specific uses. If you need to apply for a zoning change or permit for a special use, allow at least three months time from the application due date for the legal process through the Planning & Zoning

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Commission, City Council committee and final vote by the Springfield City Council. The new connections and the HVAC, fire safety, and elevator systems had to be reviewed and approved by the city. Lessons Learned: Some problems arose that should be remembered when working with new and historic construction combinations: The historic building posed technical and spatial problems for all new building systems, particularly HVAC clearances and electrical and safety systems interconnections. Drainage issues around the new building and its connections to the 1884 structure required that the owner work closely with the City to re contour the parking and public alley, an unexpected expense. The new faade extended over the public right-of-way, a consequence of the placement of earlier facade renovations. The City had to provide a variance which they did and the results are not noticeable.

Building Permits
(City Building Department, City of Springfield, Department of Building & Zoning 789-2171 Third Floor Municipal Center West) During the time required for a zoning change, you will want to contact the City to begin the review process for a building permit, if required for your project. To obtain a permit you will most likely need construction documents (final plans and specifications) prepared by an Illinois licensed design professional (structural engineer, professional engineer or architect). These will be required on remodeling that involves life-safety issues or revisions to the basic structure and on ALL new construction, including additions. A building permit is required for one- and two-family dwellings and accessory structures of over 120 square feet. This permit must be obtained before beginning construction, alterations or repairs, other than ordinary repairs that are nonstructural and do not involve replacement of mechanical, plumbing or electrical systems. Construction documents prepared by a professional are not required. However, a site plan (drawn to scale) is required. For commercial, industrial and multi-family construction, a permit must be obtained before beginning any of the following: Demolition of any building elements Construction/alteration to a structure of over 120 square feet

Construction of an addition Demolition or moving of a structure Change of occupancy classification Installation/alteration of any equipment that is regulated by the codes. Construction documents, prepared, sealed, signed and dated (current date and date of license expiration) by a design professional licensed in Illinois are required. Plans are reviewed by the City Building Department, the Zoning Section, the Fire Safety Division and the Public Works Department. Allow a minimum of three weeks for all plan reviews. If the plans are in compliance with city codes and ordinances, a building permit will be issued and

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work may begin. However, if the construction document submittals indicate code or ordinance violations, review comments are sent back to the design professional, who must respond satisfactorily to all concerns before a permit is issued. Permits for mechanical, plumbing, fire suppression and electrical work are issued separately to only licensed/ registered contractors following issuance of a building permit. Requesting Building Department periodic inspections during construction is the next step toward obtaining a Certificate of Occupancy. Work must be approved by electrical, plumbing, mechanical and structural building inspectors. After all final inspection approvals, a Certificate of Occupancy can be issued and the business is permitted to open. If there are minor problems with the work, the Building Department may issue a temporary Certificate of Occupancy (usually 30 days) and the problems must be corrected within that time. Part I Environmental (Environmental Protection Agency) After a historical review of your building (see Chapter 4), you may determine that further research is required because of potentially dangerous uses housed in the building at some time in the past. Perhaps an oil tank was in the basement or a gasoline tank was buried in the back of the building. City Fire Department records may help in your search, although they should not be considered as the only source. You may want to contact the Fire Department at 789-2170. If a title search shows a history of potentially dangerous building uses, a bank will require that a Phase I Environmental Audit be satisfactorily completed before executing a loan. If doubt exists with the Phase I, the lender may require a Phase II Environmental Audit to be satisfactorily completed. Further environmental assistance for businesses is available through the Illinois Environmental Protection Agency Help Line at (888) 372-1996.

Most turn-of-the-century buildings do not meet the current structural requirements for floor loads especially on the upper stories. Careful planning is required to limit heavy loads (such as file rooms) and to provide the additional support required to meet new office loading requirements. The existing stairs are not compliant with current regulations. A new enclosed fire stair was included in the project above after discussions with the City to provide a fire-safe primary exit. There were significant shoring and installation challenges with cutting large openings in antique brick walls (at the connection). The old masonry and mortar needed to be carefully supported during demolition and installation of new supporting structure. The City required the process to be engineered, and as a result, it went smoothly. T. David Parker, AIA MML LTD. Architects and Planners.

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Fire and Safety Regulations


Fire and safety regulations change according to the intended use. Therefore each building is considered on an

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The Fisher/Latham Buildings North 6th Street Owner: Oxmore LP Architects: Melotte Morse Leonatti, Ltd. The project Owners and Design Team had a very good rapport with the City from the beginning to the end. The Citys Code Department, Office of Economic Development and Code Inspectors were all part of the process of restoring these very deteriorated Lincoln-era buildings to usability. The financial planning with the City was very important in all stages of the work to make sure that Historic Tax Credits were verified and sold, to provide the documentation needed for the Citys financial support programs.

individual basis. Generally, checking for appropriate zoning will be the first step in a rehab. Next check with the Building CASEfor STUDY Department to identify requirements the specific use (including Illinois Accessibility Code) and if services of a design professional will be required. Upon determination of zoning and building requirements, the Fire Department will then be able to better identify specific fire and life safety code needs. This process involves a review of the proposals of the design professional. Adjustments will be recommended and an official review of needs issued during the building permit plan review process. The best friend of newcomers to real estate development is an experienced architect who can help navigate complex issues and government regulations, explaining design and budget implications to the clients along the way!

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CHAPTER SIX

FUNDING PROGRAMS

Government and Bank Funding Programs


City of Springfield Assistance Tax Increment Financing is an economic tool that was created by state lawmakers in 1977. TIF was created for local governments to help revitalize blighted areas of municipalities and is administered by the City of Springfield Office of Planning and Economic Development. Municipalities are able to make needed improvements such as new roads and sewers, and provide incentives to attract new businesses and retain existing businesses, without tapping into general funds or raising taxes. If a potential redevelopment project is located within a TIF, it may be eligible for TIF assistance. TIF eligible expenses are typically one or more of the following categories: property acquisition, demolition and site preparation, rehabilitation or renovation of existing public or private buildings, construction of public works improvements, job training, relocation, financing costs, studies, surveys, plans, marketing, professional services such as architectural, legal and engineering. Springfield has eight TIF districts. If you have a project and think you may be located within a TIF, please contact the Springfield Office of Planning and Economic Development (789-2400) prior to commencing work on your project.

Central Area TIF Rehabilitation and Business Program Summaries


Building Rehabilitation Program: This program was designed to encourage property owners to restore and rehabilitate properties located within the Central Area TIF District. The City will review three conditions to confirm the applicants need for assistance. These conditions include a financing gap (or lack of available funds), return on investment and location gap (comparison of cost factors due to location). The City will participate in the

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project up to a maximum of 20% of the total rehabilitation cost. Depending on the need and location (high priority area- Phase II), the Citys participation can be in the form of a loan, grant or a combination of both. The City will usually subordinate its lien position to the primary lender. Building rehabilitation loans can be amortized up to 10 years and can have a negotiable interest rate between 0% and 5% (at the discretion of OPED). But all loans must be paid in full by December 1, 2016 (by the expiration of the Central Area TIF District). Owners/contractors must adhere to applicable prevailing wage requirements and must agree and disclose this requirement on all construction-related contracts.

Downtown Residential Assistance Program: This program was designed to assist property owners who propose to develop upper floor residential living units within the Central Area TIF. This program has three components: (1) Residential Assistance (2) Architectural Assistance (3) Residential Rebate Residential Assistance: The City will participate in the project up to a maximum of 50% of all reasonable residential-related rehabilitation cost. Depending on the need, the Citys participation can be in the form of a loan, grant or a combination of both. The City will usually subordinate its lien position to the primary lender. Building rehabilitation loans can be amortized up to 10 years and can have an interest rate between 0% and 5% (at the discretion of OPED) but all loans must be paid in full by December 1, 2016. Owners/contractors must adhere to strict prevailing wage requirements and must disclose this fact on all construction-related contracts. Architectural (Feasibility Study) Assistance Program

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This program is part of the Downtown Residential Assistance Program and was designed to assist property owners in determining the feasibility of residential or rental development of upper-story building projects located within the Central Area TIF District. A maximum grant of $2,000, per building, is provided for architectural expenses related to the residential feasibility study. Residential Rebate: A one-time per unit rental rebate equal to six months rent, or $3,000, will be made payable to the developer once a one (1) year lease is executed by a tenant and after the tenant has occupied the unit for at least one month. Downtown Facade (purchase) Programs: This program is designed to assist property owners that have buildings located within the Central Area TIF. Only certain expenses are considered eligible in the restoration of facades. This program was revised in 2004 and now has three additional options for qualified properties:

Option 1: Historic Restoration Program Option 2: Facade Redevelopment Program Option 3: Tall Building Facade Program Option 4: Existing Facade Purchase Program With all options, the City purchases a facade easement in exchange for city assistance. The assistance amount depends on which restoration option the property owner chooses. Option 1: (Historic Restoration) The purchase amount is based on 75% of all TIF eligible facade-related costs, or $75,000 (per streetfacing facade), whichever is less. With the historic facade restoration (Option 1), there is also a $2,000 grant for historical facade-related architectural expenses.

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To be eligible for a historic renovation, the property must be one of the following: a) Located within the downtown National Register Historic District b) Listed on the Potentially Eligible for Landmarking List (a.k.a. the Demolition Delay List) c) Receive local landmark designation by the Springfield City Council Option 2: (Facade Redevelopment) The purchase amount is based on 75% of all TIF eligible facade-related costs, or $40,000 (per streetfacing faade), whichever is less. Option 3: (Tall Building Facades) The owner will choose whether to restore the building facade historically (Option 1) or a simple redevelopment (Option 2). The total purchase price for the Tall Building Facade Program will be based on two factors: 1) The first five floors of the building will be calculated according to whichever Option the owner chooses, and 2) The upper floors will be calculated at $8,000 per floor above the fifth floor. Option 4: (Existing Facade Purchase) The purchase amount will be based on the number of stories, for a maximum purchase price not to exceed $25,000 (approximately $8,335 per floor for a three-story building). Facade purchases are only available on properties that are in good/very good condition*. Assistance is at the discretion of the Office of Planning and Economic Development. With Option 4, assistance IS NOT AVAILABLE for any facades that are in poor condition, or need any repair or maintenance. Determining the condition of the facade is the sole discretion of the Office of Planning and Economic Development. Downtown Accessibility (elevator) Assistance Program: This program is designed to assist property owners in making the upper floors of downtown buildings more accessible to

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persons with disabilities. This program allows property owners to a) install ADA (Americans with Disabilities Act) compliant elevators in buildings that do not have ADA elevators; or b) rehabilitate older, non-compliant elevators and make them ADA compliant. The program only allows for one elevator per building and the elevator must service all floors (excluding the basement) in that building. A grant is available for up to 50% of all elevator-related project costs or $50,000, whichever is less. If the building is serviced by at least one ADA compliant elevator, then a property is not eligible for this program. However, a rehabilitation loan may qualify. Lease Payment Assistance Program: This program is designed to encourage new retail businesses and restaurants to start-up within the Central Area TIF district*. Small to medium sized retail businesses (excluding service businesses and businesses where alcoholic beverages account for 50% or more of their sales**) are eligible for this program, but must submit a completed application after signing a multi-year lease, or within 90 days from the first day of opening. The program will reimburse business owners 50% of their first 12 months lease payments, up to a maximum amount of $10,000, after the business has been in operation for one year. The Office of Planning and Economic Development reserves the right to lower the inducement amount if the lease amount is considered unreasonable and to reject any and all applications. Reimbursement is made one year from the date on the signed agreement and: 1) after a new one or multi-year lease is signed confirming the business will remain open in the Downtown TIF area, 2) after verification from the Department of Revenue that sales taxes are current, and 3) after verification from the landlord that all lease payments are current.
*To be eligible, business owners cannot be related in any way to the property owner ** Businesses closing shop and relocating to a TIF are not eligible for this program, unless special circumstances are involved. The Office of Planning and Economic Development has the right to determine what constitutes special circumstances. *** Restaurants may serve alcoholic beverages but food sales must be the majority of sales and food service must be available during all business hours. The Office

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of Planning and Economic Development reserves the right to determine if a business qualifies as a restaurant, service business, or bar and has the right to reject any and all applications.

Targeted Activities Assistance Program: This program was established to (1), encourage targeted businesses conducting their activities outside of Springfield to open a subsidiary location within the Central Area TIF District and (2), to assist targeted businesses that would offer services and amenities that would encourage additional residential growth to the Central Area TIF District, that otherwise would not be eligible for any other assistance programs. Some examples of targeted businesses would be grocery stores, dry cleaners, pharmacies and video stores. TIF assistance is in the form of lease payment assistance. The amount of assistance will be based upon the need and the nature of the business, the anticipated positive impact that results and the maximum amount will not exceed $15,000 per business. Current businesses operating within the city limits of Springfield are not eligible. Property owners are not eligible to lease space from themselves, relatives or related business entities. Applicants are required to sign a long-term lease at their desired location.

DISCLAIMERS: THE FOLLOWING ARE ONLY SUMMARIES AND MAY NOT INCLUDE ALL THE NECESSARY PROGRAM REQUIREMENTS. PLEASE CALL THE OFFICE OF PLANNING AND ECONOMIC DEVELOPMENT FOR A PROGRAM BROCHURE AND APPLICATION. THE CITY OF SPRINGFIELD CENTRAL AREA TAX INCREMENT FINANCING PROGRAMS ARE SUBJECT TO AVAILABLE FUNDS AND PROGRAMS MAY BE SUSPENDED AT ANY TIME. THIS SUMMARY IS ONLY INTENDED FOR INFORMATIONAL PURPOSES AND THESE PROGRAMS MAY HAVE ADDITIONAL REQUIREMENTS FOR APPLICANTS TO BE ELIGIBLE FOR A SPECIFIC PROGRAM.

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Contact: Bissi DiCenso

TIF Administrator 800 E. Monroe, Room 107 Springfield, IL 62701 217/ 789-2377 /Ext. 469 Enterprise Zone The Springfield Enterprise Zone was established to encourage job creation and capital investment in areas of economic distress and to promote neighborhood revitalization in targeted areas. The Enterprise Zone Sales Tax Exemption on building materials allows materials to be purchased within the State of Illinois free of city and state sales tax. The Enterprise Zone Property Tax Abatement is eligible to qualifying projects that make improvements to the property that result in an increased assessed value over $30,000. The citys portion of the property taxes may be abated on a sliding scale. (Properties also located in a TIF district are exempt from the Property Tax Abatement benefit.) Other attractive incentives to building or rehab within an Enterprise Zone include State Tax Incentives such as Investment Tax Credits and Utility Tax Exemptions. For more information, call the Springfield Office of Planning and Economic Development at 789-7377. State Programs Opportunity Illinois (State Treasurers Office, (312) 814-8953) This program provides the borrower with a below-market rate of interest during the first 5 years of the loan which reduces debt service costs. The Treasurers office deposits funds equal to the loan amount into the borrowers bank and gets a determined rate of interest for its investment. In turn, the bank loans this money out to the borrower at a rate that is typically 3% over the rate paid to the Treasurers Office. Historic Preservation: Preserving and protecting landmarks of historic significance (examples: architecturally significant buildings, historic sites, museums, train depots). These projects must be designated as a historic landmark or located within a designated historic district and must follow the Secretary of Interiors Standards for Rehabilitation. Funding level: Up to $10 million.

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Non profit Development: Loans to expand or improve the operations for the public good. Faith based organizations are eligible as well.

Illinois Department of Commerce and Economic Opportunity (DCEO) The States Participation Loan Program can participate in up to 25% of the total project, not less than $10,000 or more than $750,000. DCEOs rate and maturity will typically match the bank. The purpose of the program is to provide assistance to small businesses that provide employment opportunities. Funds can be used for the purchase of land and buildings, construction or renovation. There is a Minority, Women and Disabled Participation Loan Program, a Development Corporation Participation Loan Program and an Enterprise Zone Financing Program. For more information, contact Jack Weatherford at 782-3891.

Federal Programs
Small Business Administration 504 Loans The SBA 504 Loan Program provides long-term subordinated, fixed-rate financing for major fixed assets having at least ten years of useful life. The program is used for owner occupied properties. Investment properties are typically not eligible. These loans are to be used by eligible small businesses to fund up to 40% of the cost of the land and buildings, machinery and equipment, and renovation expenses. Business owner must invest at least 10% equity into the project (a startup or a single purpose building requires additional equity) and a bank funds the remaining 50% of the project. Terms are 20 years for buildings. The statewide CDC for SBA 504 loans is the Small Business Growth Corporation. They are located in Springfield and can be reached at 787-7557. Small Business 7a Loan Program This SBA loan program can also be used to finance owner occupied real estate projects. With this program, the federal government provides a partial loan guarantee to the bank making the loan. There is a local SBA office in Springfield. They can be reached at 793-5020. Historic Rehabilitation Tax Credits

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(National Register website: http://www.nps.gov/hisotry/hps/tps/tax/ index.htm)

These federal funds are administered by individual states and are available for any building that qualifies as a Certified Historic Structure (listed on the National Register or located in a Historic District and significant to that district). In the 1970s the National Park Service developed professional Standards for Rehabilitation; federal tax incentives were added to stimulate private investments in rehabilitation of historic structures. The City of Springfield has designated many properties as either landmarks or as part of a historic district. For more information, contact Mike Jackson, F.A.I.A., Preservation Architect, Illinois Historic Preservation Agency: www.Illlinois-history.gov or (217)785-5031

Bank Programs
Programs vary from lender to lender. Some banks have expertise in specific areas like construction financing and government financing. To effectively comparison shop for current offerings and rates, you will want to consult with at least three area lenders:

1.Commercial Real Estate Loans (fixed or floating rate) for the acquisition of property, typically amortized for 15-20 years 2.Construction Lines of Credit with End Loan Permanent Financing 3.Working Capital Lines of Credit

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4.SBA Financing a. 7(a) Program b. 504 Programs 5.Personal Mortgage Lending (see Chapter 3 under Financing for details)

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CHAPTER SEVEN

TIMELINES

Project Timeline and Construction Phase


Prior to beginning construction work, many projects require a construction loan to cover expenses until the work is complete. Typically, only the interest is paid to the bank during this period. The principal is rolled into a mortgage when the project is finished. Interest costs can be substantial and vary based on the amount borrowed, agreed percentage and the length of time the construction loan is held. Therefore, it is crucial to complete construction in a timely manner. Proper planning is critical to the success of the project and will result in the earliest possible cash flow from renters or buyers.

The First Steps (Pre-Construction Phase)


The Basics:
Determine the parties (individual ownership, partnership, company or corporation) in the project. Select a building. Research Historic Tax Credits and City funding potential.

The Team:

- Make a decision about your role: owner, developer and/or general contractor. - Make a list of professionals you need to hire: architect, attorney, accountant, general contractor. - Research the names of experts, local or out of town. - Engage the appropriate professionals. -Begin preliminary discussions with financing sources. Research: - Research your building and applicable codes and regulations. Explore prospective government funding sources. - Empower the architect to open discussions with City officials about codes, regulations and construction challenges. - Gather pricing information for as many items as you can (windows, elevators, plumbing fixtures, etc.) and get bids if possible. - Obtain Business Owners Liability insurance (umbrella policy may be required by lender to provide excess liability coverage), title insurance, Builders Risk and Liability

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insurance, contractors liability insurance and flood insurance.

Project Planning:

- Establish a working budget after a review with your architect and/or general contractor. - Prepare a project timeline (pre-construction) - Research designs, plans, details, materials and finishes you would like to use. Visit showrooms, magazines or the Internet. - If there are no tenants: create marketing plan to attract and secure leases from prospects. Letters of intent or actual leases may be requested by funding source. A marketing plan is the absolute minimum. - If current tenants: plan for alternate living arrangements and business interruption for your residential or commercial tenants. You can reduce this down time through careful planning to allow on-going work in other parts of the building as long as possible. When doing demolition in a building with tenants, clean up every workday, keeping in mind how you like to live and work.

Historic Tax Credits:

- Apply for historic designation for your building, if applicable, and get approval of Historic Tax Credits. Architectural Prep: - Work with the architect to develop initial plans and sketches. - Approve final drawings from the architect. - Obtain written bids based on final drawing and make appropriate adjustments to the working budget.

Construction Prep:

- Complete any demolition work needing to be done. - Contract with sub-contractors. (A payment schedule will be outlined in the contract and usually based on the percentage of the work completed. Have your architect approve payments before you issue them. Retain enough money at every stage so that you can finish the job with another company if necessary.) - Apply for permits.

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Loans:

- Secure private loans and City or other funding commitments.

- Begin shopping for lenders for construction loans, final mortgage or balloon note, and if pertinent, Historic Tax Credit. Lenders will need the following: -Set of plans -Complete itemized cost breakdown -Description of materials or specifications -Copy of contract to purchase -Projected income and expenses once the project is complete. This is critical as it provides the primary repayment source for the loan. -Financial statements and tax returns on all borrowers (business and individual) If approved, the lender will order the appraisal and determine if an environmental study needs to be done on the property. It is a good idea to get the lender involved as early as possible once preliminary plans have been made. Theres no sense in doing a lot of work and spending a lot of money on a project if financing cannot be obtained. . Once preliminaries are completed (funding in place, final drawings complete and subs engaged), and construction is underway, speed is of the essence. If you have been fortunate to complete demolition concurrent with the preconstruction phase, you may have saved many weeks of work. The goal is to complete the construction phase as quickly as possible. Whenever you begin construction, you can be assured that there will be surprises - even after demolition is complete. The hope is that the surprises do not produce lengthy delays or budgetbusting expenses. That is why most budgets include an allowance for change orders (5-20% of the total cost of the project). Your project can also be delayed by sub-contractor scheduling conflicts. This is especially true if you are a onetime developer: subs have little incentive to meet your timetable, as there will be no repeat business. Any lengthy delays increase the budget, too, because your carrying costs on the construction will increase with each passing day. Make a Plan and Work It

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Construction Phase Tasks:

Complete initial interior demolition Repair/replace masonry Install structural supports Place HVAC condensers on the roof

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Repair/replace/install elevator Repair/rebuild/install stairways Repair/replace roof (OPTIONAL) Install rooftop deck Begin repair/replacement of windows Repair/replace storefront and entrances Sandblast interior brick and wood Install mechanicals Complete major interior demolition (stairways, garage, entrances) Build/rebuild garage Repair existing or install new stairways Complete window repair Build interior walls Stub in plumbing Stub in HVAC Hang and tape drywall Install sprinkler system Paint interior surfaces Install electrical hook-ups Activate HVAC Test and activate sprinklers Install hardwood floors Restore elevator car Install cabinets and countertops Install plumbing fixtures Install carpet Install kitchen appliances Install public area flooring Create a Punch List (unfinished items) A word of advice about the punch list: when work is complete, walk through the project with your architect and make a list of outstanding items that have not been completed as agreed in the terms of your contracts. Do not issue final payments to your general contractor (or if you are the general contractor, to the various subs) until their work is complete.

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Budget:

- Keep your construction cost contingency allowance at 20% or more. There are almost always overruns in construction projects. - Be sure to determine the value of subsidies before you begin your project. Some can play havoc with your budget projections because of specific requirements.

- Prepare carefully for the timing of the receipt of funds. It will impact directly on carrying costs for your construction loan. - Research and set rents that are consistent with the market. Whatever your construction costs, you cannot charge an amount above the ceiling in the community.

General Contractor:

- Your contractor should be experienced in the type of project being done.

- Contact references, sub-contractors, architects and previous customers. We would add this caveat: do not consider acting as your own contractor unless you have a working knowledge of the construction trades and construction management. Even with that experience, it is probably advisable to have the back-up of a reliable, experienced general contractor for those tough problems (see Caveat emptor below).

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Mechanical, Electrical, Plumbing Engineer:

- Again they must be experienced. - They must also have local market knowledge.

City Building Department Meetings:

- Be sure to attend and take your architect and engineer. - Make your own list of potential trouble spots. Start by talking with your architect, then research and cost out possible solutions.

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Amenities Appropriate To The Market:

- For any overruns you should evaluate how much more rent/sale price you need to meet your investment goals. Again, explore the market rental rates for comparable properties

Beware Pre-Leasing Euphoria:

Dont put much faith in the early interested prospects. It will take time and money to lease all your units.

Caveat Emptor:

(Buyer Beware): Scheduling of Sub-Contractors This is an art that experienced general contractors have mastered. If you are acting as your own contractor, remember that your subs have no special motivation to meet your timeline expectations because they may not expect to do business with you again. Anyone in the construction trades will tell you that timelines are really goals. Something happens, and there are delays. The schedule looks great; the reality is a different matter! Faced with the choice between a one-time general contractor and a repeat customer, its easy to see why subs opt to service their long-standing customers first. You may want to consider hiring a general contractor or at least consult your architect who can do your scheduling for you.

Record Keeping and Computer Software Support:

Every project requires good record keeping. Microsoft has a software package called Microsoft Project that might be helpful in the construction process. The manual that accompanies this software states: Effective project management is vital at the start of a project when youre determining what needs to be done, when, by whom and for how much money. Effective project management is also essential after you kick off the project, when you are continually controlling and managing the project details. You frequently analyze the project tracking the schedule, the budget, resource requirements and the scope of tasks. In addition, youre managing the level of quality in the project, planning for risks and contingencies and communicating with the members of the project team as well as upper management or customers. Well said. Effective management is indeed the key to a successful project.

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CHAPTER EIGHT

MARKETING & PR

Celebrate!
You have been talking about this project for weeks, maybe months. All your friends and family have heard some of the war stories more than once. Why do you need to market the project? And how do you do it, lacking a big budget or any prior experience? When you approach a bank for a loan, apply for Historic Tax Credits, or make an appeal for City funds, you are marketing the project. When you meet with an existing commercial tenant to discuss your plans and the impact on their existing business, you are also marketing your project. When you hire professionals to assist with the work, you are promoting your plans. When you advertise in the newspaper for tenants, you are selling your location. While each approach includes different information and requires a distinct approach, they all share elements such as details of your plans, goals and an invitation and attempt to persuade others to join your project. One key to success in telling your story is to know the entire history of the building (see Chapter 4). Knowing the previous owners and tenants may help dispel (or could amplify) environmental concerns. If you are applying for Historic Tax Credits, the more you know about the role of your building in the history of the community, the better your case. A human-interest or historical approach will propel local media attention. Once your research is complete, there are several tools you may want to create to tell your story and convince others to help: Photo album or brag book Just like Grandma, you can carry around a portable history of your project or current

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status report. There are small brag books for purchase on line that use your own digital photos and captions. They may cost as little as $10 to produce and make a BIG impact! Photos can begin with the interior/exterior before pictures and conclude with the Grand Opening or the finished product. History book This could include your marketing plan, copies of your presentations, construction quotes, research documentation, financials, curriculum vitae of owners, funding applications, funding presentations, time logs, layouts, project timeline, meeting notes, selected photos, professional contracts, correspondence and notes, marketing samples, purchase offer, partnership or incorporation papers, leases, tax ID, insurance contracts, rental applications and forms. Storyboards or window displays One way to let the public know changes are coming is to create a large and attractive window display mixing photos, memorabilia and exterior sketches or floor plans. If you are computer savvy, you may be able to create your own storyboards, scanning old photos and documents and placing an Excel file for conversion to a .pdf that can be provided to a local company that produces the finished display. PowerPoint presentations This staple of the business sales call is also useful in making a pitch for funding. You can tailor the story to each audience, dropping or adding standard slides accordingly. You can also insert photos and sketches to help flesh out your plans or illustrate a point. Standard slides could include: building history, team leadership (owners), project goals and budget, financials (including operating cash flow, funding affect on budget, standard real estate analysis), and marketing plans. If you are working with the City of Springfield, Sangamon County, State of Illinois or U.S. government funding sources, it behooves you to spend some quality time thinking about what they can get from working with you. Then include that information in your presentation for assistance. Be lavish in your praise! Everyone likes a public pat on the back. There are many ways to announce your project. Here are a few: Paid print ad Are you looking for tenants? If they are residential renters, you will want to include this in your mix. Include this cost in your budget, and since you pay by the word keep the description brief but enticing. Perhaps we could try a DSI version? A mini-Upper Story Tour?

EIGHT 48

The DSI office can spread the word to others interested in downtown development. The organization produces a newsletter several times a year, and also sends a weekly amalgam of news, member announcements and ads, activities listings and other items of interest to downtown boosters. Your project will definitely qualify. Open House You may wish to host your own open house for the public. Again, this can be done in conjunction with the DSI architectural tours or events that are held in the spring and fall that generally include open houses at buildings of architectural or historic interest. Or you can produce your own open house. (Mayors Media Conference If you are working with City officials and receiving government assistance, you may well be considered for inclusion in the weekly media conference. No matter who presides over the City Council, they are always ready to applaud new and exciting projects downtown! At times, when there is a dearth of good news, you may be approached before you ever decide how to broach the subject with someone at City Hall.) Possibility? Media Release If you have never written one, talk to someone experienced in this art. It is not black magic, but here are several suggestions to help you create a winning release. Limit your release to one page with the copy double-spaced in a font no less than 10 points. You may want to come up with a catchy title and grab the attention of your readers who are media pros and not easy to impress. Make sure you have included within the first paragraph or two the precise who-what-why-where-when of your activity. If your announcement is more in the vein of news than specific celebration or event, you may want to call the print media news desk (or Business reporter) and the news director of television and radio stations. DSI can help you identify people in the media industry in Springfield who would be willing to volunteer their time to help you write, prepare and distribute your materials. Media Interviews Do you have the ear of a radio personality, newspaper editorial writer or TV reporter? Let them know what you are doing, and invite them in! Human interest and news stories blend in a downtown development project. And everyone is always looking for a fresh angle on the downtown story or to be the first news team on the scene. DSI has (will have) a copy of Making News in Mr.Lincolns Hometown that provides addition tips and contacts for

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various print and broadcast media in and around the city. You can make photocopies Letter to the Editor Write to the local newspapers or call one or more of the local network TV stations. Most invite reader-inspired stories. And good news from downtown is always welcome. When contacting a television station, make sure you have some bullet points ready that explain what youve done, and why its unique. Formal announcement If you are associated with a real estate developer or realtor, they may well want to produce an announcement for their regular mailing list. Perhaps you have a mailing list of your own. Chamber of Commerce Are you a member of the Greater Springfield Chamber of Commerce? The Chamber publishes a newsletter, offers a variety of services for small and large businesses, and routinely makes announcements relating to local business expansion. Springfield Convention and Visitors Bureau - Here is another public avenue for partnership. If your project includes recreational space indoors or out particularly if your venue provides an activity to attract visitors to Springfield you might be in a position to interest the SCVB in a public announcement.. TV Network or Cable Shows From national cable television programs to your own local television stations, this medium could get your property anything from a few minutes on the evening news, to a whole program on your local PBS station. Your best bet is to email a television producer with your press release and some photos; then follow up with a phone call a few days later. If your property is extra unique, you might contact the producers of programs on HGTV, DIY or TLC. Keep in mind the national programs get hundreds of queries and proposals, so your chances on the national level are relatively small.

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CHAPTER NINE

ADMONITIONS & OPPORTUNITIES

Building On Our History

In evaluating the redevelopment and the new development in Springfield that has occurred over the past several years there are two major reasons for this activity. The first is a result of the rich history that exists because of the time spent here by Abraham Lincoln and the existence of the state capitol. These facts have caused a strong desire to preserve this history through the restoration and redevelopment of many of the buildings of the Lincoln era. This is very evident in the downtown area and several historic areas adjacent to downtown. This redevelopment was not necessarily for profit purposes, but for pride and preservation of Springfields historic past. The second major reason is due to the strong and stable economic environment of the area. Springfield consists of an economy that is very resistant to major swings. As a result, business owners and investors alike can become a part of the Springfield market with the expectation that their investment will have a high degree of a chance for success. Commercial Broker Coldwell Banker Devonshire

Curtis Tillet

It does not take many conversations with the early pioneers of urban redevelopment in Springfield to conclude that there are plenty of lessons to be learned on all sides. But among the most pressing concerns was the need for improved and streamlined partnerships with both the city and local lending institutions. Those of us working in downtown development now owe a hearty thanks to our predecessors. They helped make todays discussions with lenders much more fruitful. Each project benefits from the success of the previous one. Key to a successful building rehabilitation project includes up-front planning and construction cost estimating to evaluate the functional, aesthetic and financial merit of the potential project. AIA, Architect and Developer

Bruce Ferry

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Political and market forces are at work today, and they always have been in the past. The local economic environment, long-depressed real estate values downtown, and plentiful examples of successful urban loft living models across the country have also had a positive impact. Several quotes from Springfield trailblazers are instructive: Our family decided to rehab the K-Mart building downtown on the corner of 5th and Adams with a personal reward in mind. My wife and I wanted to live downtown. We were able to make the project cash flow, back before downtown rehabilitations had taken off. This was due to help from the city with a low interest loan, structuring the tenants to be first floor retail, second floor office and the remaining space residential leases. The first few years, while we lived in one of the apartments, we went out to dinner downtown somewhere different every night. We walked to one of four restaurants and enjoyed it very much. I was so pleased when I was back in Springfield for a Christmas visit this year to see downtown bustling with many more choices for dining and shopping! Commercial Developer

Gene Gerber

A long tested strategy proven to result in downtown revitalization across the country is to attract apartment dwellers with disposable income to well-maintained buildings. They provide the impetus for entrepreneurs to establish restaurants, retail and offices which add hustle and bustle to the streets, not to mention increased property tax revenue to the City. In Springfield the City provides financial incentives for rehabbing downtown through the tax increment financing or TIF funds. Commercial Developer And From The Finance Viewpoint In general, the local banks are receptive to developers projects as long as there is some equity in the project and there is demand for the project. Banks want to be paid from cash flow generated by the project once it is done and

Carolyn Oxtoby

NINE 52

not from liquidation. Office and retail space seems to be ample throughout the City. Additional residential space is needed downtown as demand has grown in recent years. Downtown parking continues to be an issue, although the problem is more perceived than actual. There is plenty of parking within walking distance to any downtown location. Commercial Lender Illinois National Bank

John Maxfield

It is clear that we need a strong and evolving partnership with the City to make this happen. It is not enough to study and report endlessly on possibilities or undertake individual projects in a planning vacuum. With the City as a partner, we must develop a working relationship established on trust, mutual respect and collaboration. Prospective developers must come prepared with budgets, professional support and do-able plans; city officials must seek out appropriate partners and create working models for partnership that include a cocktail of funding options and cooperation in codes and building requirements. With equity investment and willing hands, Springfield can realize the dreams of the visionaries who love this city.

We meet with at least four people a month that want to start a new business in downtown Springfield. Their energy and enthusiasm is contagious and reaffirms that Springfield is the place to do business.

NINE

Executive Director, DSI, Inc.

Victoria Clemons

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CHAPTER TEN

TOP TEN LESSONS

10

Enough Already! Okay, okay we went on longer than we intended. Here is a chapter for the speed-readers, those of you who read only Cliff Notes and still aced the tests. These concepts are so big weve even increased the font to accommodate the ideas. 1. VISIT THE VETERANS: They may not be old and grizzled. Some, like Amy Hathaway from Shoetopia or Troy Freeman from DigItAll Designs, are under 40. But they have plenty to share about their experiences. And what they have done will provide the foundation upon which you will build. (Chapter 1) 2. INVEST IN EXPERTS: Dont think you can do this without quality help. And dont forget: you get what you pay for! (Chapter 2) 3. RUN THE NUMBERS: You may be in this for the love of the downtown, or old buildings, or whatever. But you need to know how much it will all cost. Will you be upside down in your project? (Chapters 2 and 3) 4. GET AN AGREED PRICE: Get a bid, make a deal and stick to it. This is especially tough with some of the professionals youll employ, but it is a must with them and with the construction subs working on the job. Take the time on contracting bids to allow for value engineering in the face of big cost over-runs. (Chapters 2 and 7)

TEN

5. DONT SKIP THE HISTORY LESSON: What you learn may make your project more saleable for Historic Tax Credits, marketing to the City (and through them to the community). And its just darn interesting to know who was there before you! (Chapter 4)

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6. CONNECT THE DOTS: You cant skip the mechanics of working with the City on a rehab or construction process. And heres another reason to hire an architect he/she can help you navigate the murky waters of any bureaucracy. (Chapter 5) 7. CONSIDER THE POSSIBILITIES: Do you qualify for a Small Business Administration (SBA) loan? Historic Tax Credit? TIF funding? Failing to ask the question can leave lots of cash on the table in the case of the HTC, up to 20% of the renovation cost! (Chapter 6) 8. KEEP YOUR EYES ON THE PRIZE: Its easy to become distracted. Jargon, subs who only respond to repeat customers, complex financing deals, professional fees, waiting out government funding any number of things can drive you to distraction. But dont forget the goal! 9. WATCH THE CLOCK: Time is money (or something like that), said the Mad Hatter to Alice. From spiraling professional fees to skyrocketing construction costs to delays that escalate your carrying costs on the construction loan they all add to the bottom line. (Chapter 7) 10. CELEBRATE: You earned it and dont forget to include all the folks who helped get you there! (Chapter 8)

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CHAPTER ELEVEN COMMERCIAL REAL ESTATE NETWORK


What is the Commercial Real Estate Network?
What is the Commercial Real Estate Network? The Commercial Real Estate Network, also referred to as CREN, was established in 1999 as a service of the Capital Area Association of REALTORS. CREN caters exclusively to the needs of REALTORS who are engaged in the practice of commercial real estate brokerage and leasing throughout the Illinois Capital Area. The mission of CREN is to promote the cooperative transaction of commercial real estate business in the Capital area through education, information, networking and the open exchange of timely, accurate property information. The objectives of CREN are to: Unite REALTORS in the Capital Area who specialize in commercial real estate brokerage and leasing; Continue to be the most comprehensive and up-to-date source of commercial real estate listings throughout the Capital Area; Encourage cooperation, networking and the exchange of specialized information among commercial practitioners; and, To assist in advancing the economic growth of the community by effectively exerting a beneficial influence oncommercial real estate. RCA Accreditation In 2008, CREN was among the very first commercial structures in the country to receive the RCA Commercial Services Accreditation conferred by the REALTORS Commercial Alliance (RCA), the commercial division of the National Association of REALTORS. Some of the things that the application asks about that sets CREN apart from many other REALTOR associations include: the operation of a commercial information exchange (CIE), a dedicated commercial website, networking events, a membership consisting of at least 5% of total

11

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ELEVEN

members and specialized education programs, to name a few. For additional information on CREN or to activate your account contact the Capital Area Association of REALTORS at 217/698-7000 or via email at info@caaronline.com.
Would you enter into a business deal without expert consultation? Leasing a commercial property is a massive, time-consuming and complicated process. You need someone with experience to help you, someone who specializes in business properties, and commits to a strict code of ethics. When youre ready to lease, buy or sell a commercial property, make sure youre working with a REALTOR and a member of the Commercial Real Estate Network.
In May of this year the Commercial Real Estate Network was among the first to receive the RCA Commercial Services Accreditation from the REALTORS Commercial Alliance.
COMMER CIAL Real Estate

COMMERCIAL SERVICES

Commercial Real Estate Network


It pays to consult a member of CREN
The Commercial Real Estate Network (CREN) is a service of the Capital Area Association of REALTORS.

The official website of CREN is www.SeeBuildings.com.

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DIRECTORY COMMERCIAL REAL ESTATE NETWORK of the CAPITAL AREA ASSOCIATION of REALTORS
Barber, David Illini Properties 22 Virginia Lane, Springfield, IL 62712 davidbarber2@gmail.com 217-529-1236 (Cell) 217-652-1064 (Fax) 217-529-8358 Barber, John Barber, John A., Inc. 1333 Wabash Avenue, Springfield, IL 62704 thecub@insightbb.com 217-725-1111 (Fax) 217-792-2555 Beck, Mark Aspen Real Estate Company 3261 Meadowbrook Road, Springfield, IL 62711 markabeck@mac.com 217-698-9956 (Fax) 217-726-0850 Bledsoe, E. Rodell Bledsoe Real Estate 1516 South Pasfield, Springfield, IL 62704 crerodell@sbcglobal.net 217-525-2244 (Cell) 217-638-5967 (Fax) 217-525-2243 Camerer, Joe Commercial Appraisal Network 10 S. Brentwood Blvd., Ste 414, Clayton, MO 63105 appraisalnetwork@sbcglobal.net 314-862-9199 (Fax) 314-862-9299 Clark, John Real Estate Group 3701 West Wabash, Springfield, IL 62711 johnbclarkrealtor@motion.net 217-787-7000 (Fax) 217-787-7779 Curvey, Bernard Curvey Real Estate, Inc. 611 Springfield Rd, P.O. Box 677, Taylorville, IL 62568 curvey@ctitech.com 217-824-4996 (Fax) 217-287-2111 Drewes, Jerome Landmark Real Estate, Inc. 3085 Stevenson Drive #303, Springfield, IL 62703 landmark.re@sbcglobal.net 217-529-1200 (Fax) 217-529-1235 Dugan, Bianca NAI True 3500 Mitchell Drive, Springfield, IL 62711 bianca@naitrue.com 217-787-2800 (Cell) 217-899-8010 (Fax) 217-787-2802 Egizii, Rodney Aspen Real Estate Company 3261 Meadowbrook Road, Springfield, IL 62711 re@aspensellshomes.com 217-698-9956 (Cell) 217-836-4000 (Fax) 217-726-0850

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Faeth, Bob Realty Executives 128 South Grand Ave. W., Springfield, IL 62704 rlfaeth@aol.com 217-547-5500 (Cell) 217-652-6091 (Fax) 217-547-5503 Frost, Tom Aspen Real Estate Company 3261 Meadowbrook Road, Springfield, IL 62711 thomas_frost@sbcglobal.net 217-698-9956 (Cell) 217-652-8972 (Fax) 217-391-2483 Fulgenzi, James Re/Max Professionals 2475 West Monroe, Springfield, IL 62704 jim@yourhome101.com 217-787-7215 (Cell) 217-341-5393 (Fax) 217-787-8957 Garrison, Roger Garrison Group, Inc. 1999 Wabash Ave. Ste. 202, Springfield, IL 62704 roger@garrisongroupinc.com 217-241-0202 (Cell) (Fax) 217-241-4202 Graham, Kevin Real Estate Associates LLC 2030 Timberbrook, Springfield, IL 62702 KGraham367@aol.com 217-789-7200 (Cell) 217-638-5100 (Fax) 217-789-2600 Higginbotham, Michelle Coldwell Banker Commercial Devonshire 3201 Old Jacksonville Rd., Springfield, IL 62711 mhigginbotham@devonshire-realty.com 217-726-3197 (Cell) 217-553-4629 (Fax) 217-726-3181 Hohmann, Richard Hohmann Agency 1850 W. Morton, Jacksonville, IL 62650 rhbroker@mchsi.com 217-245-6166 (Cell) (Fax) 217-245-6167 Jackson, Susan Garrison Group, Inc. 1999 Wabash Ave. Ste. 202, Springfield, IL 62704 susan@garrisongroupinc.com 217-241-0202 (Cell) 217-553-4244 (Fax) 217-241-4202 Kent, Douglas, CCIM Charles Robbins, REALTORS 2144 S. MacArthur, Springfield, IL 62704 dkent99@msn.com 217-525-2112 (Cell) 217-725-5161 (Fax) 217-525-0545 Kilroy, John Re/Max Professionals 2475 West Monroe, Springfield, IL 62704 john@johnkilroy.biz 217-787-7215 (Cell) 217-816-5788 (Fax) 217-787-8957 Klemm, John Sangamon Realty 3900 Wood Duck Drive, Suite A, Springfield, IL 62711 pipergl@aol.com 217-793-1967 (Fax) 217-793-8601

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Kramer, Rick Coldwell Banker Commercial Devonshire 3201 Old Jacksonville Rd., Springfield, IL 62711 rick.kramer@devonshire-realty.com 217-547-6650 (Cell) 217-309-0999 (Fax) 217-215-5195 Kuhar, James Aspen Real Estate Company 3261 Meadowbrook Road, Springfield, IL 62711 jim@jimkuhar.com 217-698-9956 (Cell) 217-415-5555 (Fax) Leonard, Lindsey Coldwell Banker Commercial Devonshire 3201 Old Jacksonville Rd., Springfield, IL 62711 lindsey@curtistillett.com 217-547-6650 (Cell) 217-899-4888 (Fax) 217-726-3199 Madden, Derek Coldwell Banker Commercial Devonshire 3201 Old Jacksonville Rd., Springfield, IL 62711 derek.madden@cbcdr.com 217-547-6650 (Cell) 217-971-5322 (Fax) 217-726-3181 Mahoney, Ed Re/Max Professionals 2475 West Monroe, Springfield, IL 62704 mahoneyed@juno.com 217-787-7215 (Cell) 217-494-6468 (Fax) 217-787-8957 Marriott, Bill Real Estate Group 3701 West Wabash, Springfield, IL 62711 marriottjr@comcast.net 217-787-7000 (Cell) 217-741-0198 (Fax) 217-787-7779 Myers, Michelle Coldwell Banker Commercial Devonshire 3201 Old Jacksonville Rd., Springfield, IL 62711 mmyers@devonshire-realty.com 217-547-6650 (Cell) 217-825-9897 (Fax) 217-215-5195 Myers, Steve Myers Commercial Real Estate 1 W Old State Capitol Plaza, Springfield, IL 62701 smyers@myerscommercialre.com 217-747-0019 (Cell) 217-306-4137 (Fax) 217-747-0026 Nichols, Samuel NAI True 3500 Mitchell Drive, Springfield, IL 62711 sam@naitrue.com 217-787-2800 (Cell) 217-494-0800 (Fax) 217-787-2802 Peters, Jim Coldwell Banker Commercial Devonshire 3201 Old Jacksonville Rd., Springfield, IL 62711 jpeters645@aol.com 217-547-6650 (Cell) 217-899-8150 (Fax) 217-726-3181

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Polk, Dennis Realty Executives 128 South Grand Ave. W., Springfield, IL 62704 DennisLPolk@hotmail.com 217-547-5500 (Cell) 217-725-3131 (Fax) 217-547-5503 Raftis, Amelia Hurwitz Enterprises One Lawrence Square, Springfield, IL 62704 ARaftis@blackstonehurwitz.com 217-544-4002 (Cell) 217-415-1338 (Fax) 217-544-5711 Seppi, Art Charles Robbins, REALTORS 2144 S. MacArthur, Springfield, IL 62704 art@seppi.us 217-525-2112 (Cell) 217-652-7755 (Fax) 217-525-0545 Skeeters, James A. Real Estate Center 808 Bruns Lane, Springfield, IL 62704 hnstjim@sbcglobal.net 217-546-6001 (Cell) 217-971-8000 (Fax) 217-546-6074 Skeeters, James J. Re/Max Professionals 2475 West Monroe, Springfield, IL 62704 jimskeeters@remax.net 217-787-7215 (Cell) 217-971-6775 (Fax) 217-787-8957 Smith, Todd Garrison Group, Inc. 1999 Wabash Ave. Ste. 202, Springfield, IL 62704 todd@garrisongroupinc.com 217-241-0202 (Cell) 217-553-5439 (Fax) 217-241-4202 Spengler, Philip Wanless-Spengler, Ltd. 1333 Wabash Avenue, Ste. B, Springfield, IL 62704 spengler@comcast.net 217-793-2555 (Cell) 217-622-6226 (Fax) 217-793-2555 Sperry, Dan RE/MAX Commercial Properties 2302 Little Round Top, Edwardsville, IL 62025 dan@sperrylistings.com 217-529-1600 (Cell) 217-725-2467 (Fax) 217-718-4239 Tillett, Curtis Coldwell Banker Commercial Devonshire 3201 Old Jacksonville Rd., Springfield, IL 62711 curtis@curtistillett.com 217-547-6650 (Cell) 217-553-7022 (Fax) 217-726-3199 Webb, Betty Webb & Associates Realty 2709 W. Washington, Ste. D, Springfield, IL 62702 bettywebb@realtor.com 217-726-8000 (Cell) 217-341-4924 (Fax) 217-726-8090

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