Plaza loan collateral deal OK'd by Trust

Local economic development agencies are fine-tuning an additional loan package approved last month for Riverview Plaza.

Watertown Local Development Corp. was the first to approve a change in collateral for $240,000 in additional loans three local agencies approved. Last month, the board expected developer Michael A. Treanor to pledge equity in another property.

On Thursday morning, board members approved a plan whereby the development agencies would be paid with half of the cash flow from the rentals. The other half would go to a capital reserve account until the financing is paid off.

"The capital reserve account is for improvement to the project or fixes," said Kevin J. Jordan, director of project development for the Development Authority of the North Country. DANC is the lead on the three agencies' financing for the project.

"The owners can't withdraw from it until the additional financing is paid off," he said Thursday afternoon.

Donald W. Rutherford, chief executive officer of the Watertown Local Development Corp., told the Trust board, "He doesn't have any property he owns alone that he can pledge."

The corporation is also known as Watertown Trust. The Trust, DANC and Jefferson County Industrial Development Agency agreed at the end of February and the beginning of March to extend $80,000 each in permanent loans to Riverview Plaza.

The Trust and DANC have a total of $311,250 each in permanent loans on the $2.9 million project.

"As big an operation as he purports to be, it shouldn't be too difficult to raise this kind of money for the short term," Mayor Jeffrey E. Graham said.

The Trust board agreed to the change if the agencies are pledged the reserve account and paid periodically instead of annually.

"This way, they'll get the additional $240,000 paid down quicker," Mr. Jordan said. The rents have increased compared to the original plan and at least 10 apartments are already rented, he said.

Mr. Rutherford said, "The problem is that we have to resolve this fairly quickly because we stand to lose a substantial amount of money."

Board Vice President Mark S. Bellinger abstained because his employer, Watertown Savings Bank, is the commercial lender in the deal.

DANC's project committee will see the proposed change on March 25 and Jefferson County Industrial Development Agency's loan review committee will examine the change on Tuesday, followed by the full board on April 1.