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Council approves loan subordination to support downtown rehab and three apartments
Summary
To enable bank refinancing and building improvements at the old Scribe 40 building, the council approved subordinating the city’s loan so National Bank of Commerce can issue a larger first mortgage; owner Roma Korzinski said improvements are roughly $400,000 to create three two-bedroom apartments.
The International Falls City Council approved a request from KOR Properties LLC and the National Bank of Commerce to subordinate the city’s loan position so the property owner can refinance and make building improvements at the former Scribe 40 building at 204 4th Ave.
David Olderman, commercial loan banker at National Bank of Commerce, and owner Roma Korzinski described plans to build out three two-bedroom apartments and add a shared laundry. Korzinski told the council the improvement budget is “about $400,000 roughly.” Council discussion included an assurance that the city’s portion of the loan would not be adversely affected by the subordination; a councilor noted that the city’s program would remain in second position and that the primary mortgage (with NBC) would be larger because of the improvements.
Councilors moved and seconded the request and approved the subordination unanimously. The motion allows the bank to issue a new first-position mortgage while the city’s loan takes a subordinated place to facilitate the refinancing and improvements.
The council did not specify additional conditions in the meeting; staff follow-up was expected on final loan documentation to reflect the new lien positions.
