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Kristen asks council to secure previously approved loan with property and life-insurance collateral
Summary
Kristen asked the council to allow a staged draw on a previously approved loan — releasing $300,000 now while securing an additional $250,000 with extra collateral (two houses and life-insurance cash value). Council asked for insurance cash-value statements, property appraisals and itemized project costs before voting.
Kristen presented options to secure a loan the council approved over the summer, saying the building’s "as‑is" appraisal came in just under $300,000 and that she could begin construction if funds could be arranged.
She proposed taking an initial $300,000 draw to finish revenue-producing parts of the project (the apartment and retail/cafe area) and holding an additional $250,000 until the council had verifiable collateral. "I'd like to do the old milk shop ... the apartment and potentially depending on funds do like the garden area," Kristen said, describing a phased approach to get income flowing before tackling the restaurant and Speakeasy areas.
Kristen said she has whole-life insurance policies with face values she described (one policy she referenced at about $244,000 face value and another employer policy of $25,000) but acknowledged uncertainty about their cash‑value availability for lending. "The face value means nothing," a staff member noted; council asked specifically that staff verify cash value rather than face value.
Council and staff outlined the next steps: obtain cash‑value statements for the insurance policies, secure appraisals for two houses the applicant offered as additional collateral, confirm lien positions if a house is to be paid off to create clear first‑position security, and prepare legal documents for committee review. Staff said legal paperwork could be readied quickly if the committee agrees on terms.
Council members signaled some willingness to permit a $300,000 initial draw while leaving the total loan capped pending full collateral verification. They asked Kristen to provide an itemized cost estimate and any updated plans or drawings to accompany the appraisals before the next committee meeting in two weeks.
The council did not vote on final loan terms at the meeting; members agreed to return the item to committee with the requested documentation. Remaining questions recorded in the discussion included whether the retail space would generate sufficient income, the true cash value of life‑insurance policies versus face value, and the timing of appraisals.
Next procedural steps: Kristen will attempt to obtain insurance cash‑value information and appraisals on the two properties and submit an itemized budget; staff will prepare draft legal documents so a committee or special council meeting could consider formal terms once collateral is verified.
