The Industrial Development Board of Alcoa, Maryville, and Blount County (IDB) would like to utilize recovery act facility bonds (tax exempt) made available by Congress to finance construction of a new technology speculative building (50,000 sq ft.) in our new regional technology park, Pellissippi Place. We have 2 companies who will occupy 40% of the total floor space inside the facility. Private developers in our area are hesitant to invest into facilities like these because they are very niche buildings which require a lot of infrastructure. The average size of these R&D companies is 17 people. Therefore, we would like to use recovery act bonds to finance construction of this type of facility.
The issue that we are facing is that we have met several times with all of our financial institutions about the loan(s) needed for construction of the facility. Our three governments have guaranteed that the IDB will have sufficient funding to retire the debt for the facility as soon as the economy recovers. Our financial institutions have stated that a good portion of the problem is the bank examiners poor opinion of these types of loans. They are called classified loans and banks are being told to stay away from them, even though our IDB is financially healthy. The Banks have said they want the facility 80% leased before they can loan the money to our IDB. This position does not work for us because these tech companies are so small it would take several of them before we can reach our 80% thresh hold. These companies cannot wait on a critical mass to evolve because they need space quickly. The tech companies don’t have the time to wait a year or two while we try to bring others into the facility.
Our financial institutions have encouraged us to speak to all of our elected officials about the poor lending attitudes of the bank examiners. Have you experienced a similar situation, with the examiners being so conservative and the money that Washington has made available to help kick start development is not getting out?