South Bend establishes loan fund to incentivize redevelopment of vacant properties
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South Bend officials are providing new incentives to help small developers take on abandoned storefronts.
In a press conference Monday, members of Mayor James Mueller’s administration announced a new vacant building credit enhancement fund with a goal of sparking new life in neglected buildings.
Under the program, South Bend will provide up to $500,000 in loans to projects that help the city revitalize its commercial corridors. Developers must secure outside funding through a traditional lender to cover 50% of project costs. Loans from the city’s credit enhancement fund will cover up to 40% of project costs leaving developers to fund 10% themselves.
Caleb Bauer, South Bend’s executive director of community investment, says it comes as an effort to renew spaces left empty after decades of population decline and more recently after the financial crisis of 2008 took its toll on local businesses.
Caleb Bauer speaks during a press conference about goals for South Bend’s new vacant building credit enhancement fund.
The city is making $1.5 million of American Rescue Plan Act dollars available in the loan fund. The fund will be revolving, meaning as loans are returned more projects will be funded.
“Rebuilding our neighborhoods block by block has been a top priority of my administration,” Mueller said. “This is just yet another way in which we’re doing that.”
The Business Development Corp., which has been designated a priority certified development company by the U.S. Small Business Administration, will administer the program.
City officials say they’re looking particularly for new commercial uses, though residential plans would be considered. Corridors like the city’s Lincoln Way West, Western Avenue and Michigan Street near Four Winds Field are all of interest, Bauer said.
The city held its press conference Monday in the century-old Inwoods Building on Michigan Street owned by local developers Jennifer Henecke and Sarah Hill of Penny Hill Properties.
The space — once a Sears department store, then a local grocery store owned by the Inwood family — is now neighbored by artist studios and boutiques. But, the Inwoods Building is in need of repair.
“We’ve owned this building since November, so we have not been in this space for very long,” Henecke said. “But, we can imagine for a project this size, that you do need some backing. You need some support in order to get people interested in (getting) the work done, especially in the financial situation, or economy, we’re in right now.”
Jennifer Henecke of Penny Hill Properties speaks about her vision for redevelopment of a vacant storefront in South Bend.
The former Inwoods storefront, just blocks from Four Winds Field, is in a section of the city already positioned for growth. The Monreaux — an apartment development by former Notre Dame basketball standout Devereaux Peters — recently received tax credits to build at the corner of Michigan and Monroe Streets. And another complex, Diamond View Apartments, is looking to construct two buildings on a vacant lot across from Four Winds Field.
“It’s invaluable to not just what’s happening in this building and what goes in here next,” Mueller said of the loan program from the Inwoods Building on Monday, “But, what happens with the rest of the neighborhood.”
The Business Development Corp. is accepting loan applications now and officials say the first loans could be offered within 30 to 45 days. More information about the new vacant building credit enhancement fund is available on South Bend’s website and on the Business Development Corp.’s website.