Council OK’s $500,000 loan
The city of Cairo is inching closer to finalizing the purchase of the former Bank of America building and Cairo City Manager Chris Addleton hopes to close on the transaction within the next two to three weeks.
“This has really been difficult because I’m having to depend on so many other people to wrap this deal up. It is really not a priority for Bank of America,” Addleton said.
The Cairo City Council Monday night accepted the low bid on a construction loan and permanent financing for the project from Citizens Bank.
The city is purchasing the building at 225 5th St. N.E. to house the Cairo Career Center of the Georgia Department of Labor, which is currently headquartered in a store front at the Downtown Plaza Shopping Center.
The purchase price of the bank building is $150,000 and Addleton is predicting the cost of renovations to run between $300,000 and $350,000.
Quotes on a $500,000 loan were solicited and Citizens Bank of Cairo bid 1.25 percent on the construction loan with a maturity of six months. For the permanent loan, the bank bid an interest rate of 2.60 percent for a term of 10 years.
According to the city manager, should the city need the full $500,000 to complete the project the monthly loan payment would be $4,736.27 and the monthly lease to be paid by the Department of Labor will be $4,751.
Councilman James H. (Jimmy) Douglas expressed his concern that the monthly lease would just barely cover the loan payment.
“This is the worst case scenario. I’m hoping we can do the renovations for less than $350,000 and be able to bank $200 to $300 per month for maintenance and upkeep of the facility,” Addleton said.
The city manager said maintenance costs should be minimal for the next several years following the complete renovation of the building that is being planned.
Mayor Richard VanLandingham also noted that it is a “short term pay back” for the project by financing the project for only 10 years.
Douglas also asked if there was a prepayment penalty, which Addleton said he was not certain and would verify.
Councilman Douglas then offered a motion to approve a construction loan up to $500,000 from Citizens Bank at 1.25 percent and a permanent loan up to $500,000 at 2.65 percent for a term of 10 years. The council voted unanimously to accept Citizen Bank’s bid.