BACKGROUND

In April 2014, the Village Board approved a Zero Interest Loan program to help encourage economic development in Arlington Heights.  As approved, the program offers a loan of up to one-half of eligible project costs, not to exceed $10,000.  In 2015, the maximum loan amount was increased to $20,000 in order to generate more interest in the program.

Over the past two years, two such loans have been approved, although the Village did also approve 18 COVID-relief loans in 2020, and 16 forgivable loans through CDBG funding in 2021, for Arlington Heights businesses.  In looking for ways to make the standard loan program more enticing to new and existing businesses, Staff and the Arlington Economic Alliance are proposing modifications to the current program.

FUNDING

The program is funded through application fees and rebates from recipients of the Cook County Class 6b and 7c property tax abatement incentives, as well as repayments of existing loans.  The fund currently holds over $1.3 million.

PROPOSED LOAN STRUCTURE

The changes proposed would:

·         Increase the maximum loan amount from $20,000 to $25,000

·         Cover up to 75% of project costs (an increase from 50%)

·         Enable a forgivable provision for existing businesses that have operated in Arlington Heights for at least three years

There would be no changes regarding eligible costs, interest accrued, or repayment schedule.  Requests for greater than $25,000 could be considered on an individual basis by Staff and would require Village Board approval.

ECONOMIC ALLIANCE RECOMMENDATION

At their April 19, 2023 commission meeting, the Arlington Economic Alliance voted to unanimously recommend the aforementioned changes for approval.

RECOMMENDATION

It is recommended that the Village Board concur with Staff’s recommendation, and the Arlington Economic Alliance motion, to make the proposed changes to the Zero Interest Loan program:

1.   Increasing the maximum loan amount from $20,000 to $25,000

2.   Covering up to 75% of project costs (an increase from 50%)

3.   Enabling a forgivable provision for existing businesses that have operated in Arlington Heights for at least three years

Language would be added to the application stating that requests greater than $25,000 could be considered on an individual basis by Staff and would ultimately require Village Board approval.