GALION, Ohio — Galion City Council passed a resolution Tuesday that entered the city into a $987,740 revolving loan fund agreement with Ohio Capital Corporation for Housing.
OCCH is a nonprofit investment firm out of Columbus that has worked with Galion in restoring the Central Hotel Apartments on the square.
As part of the deal, Galion can choose one of four “put options” if OCCH decides to back out of the agreement, creating a safety net for the city.
Mayor Tom O’Leary explained the put options as “take-out options,” which include acquiring a mortgage, donating the building, turning it over to a nonprofit entity or the city pays OCCH $1,000 to allow the investors to back out.
“If they say, ‘we’re tired of doing this’ then they come to us and say, ‘here are the four options,’” O’Leary said.
However, Mayor Tom O’Leary thinks it unlikely OCCH will owe more then the loaned amount by 2020, when the term of the loan agreement ends.
“The city will most likely co-own the building by the end of 2020,” O’Leary said.
OCCH president Hal Keller, who was present at city council’s meeting on Tuesday, said he expects to house 12 tenants by January and another six by April. According to O’Leary, Galion will be responsible to fill the remaining 18 rooms.
Keller said an inspection is scheduled for Wednesday, Dec. 23 of the building.
“It’s going along as well as we had expected,” Keller said.
Council member Michael Richart said the loan agreement is the final piece to the puzzle before getting occupants into the building, which was originally built in the late 1800s.
City council also approved amended legislation to approve the donation of the vacant 299,000 square-foot HTI building. The resolution allows the city to close the deal sometime next week, Law Director Thomas Palmer said.
Council member Susan Bean was concerned about long-term repair and maintenance costs.
“I do have a lot of concerns about the diversion of city resources for repairs, for man hours to do those repairs, for man hours to maintain the property, for man hours to manage tenants … I am fundamentally opposed to a city becoming involved as a realtor. It’s not a good use of taxpayers’ money,” Bean said.
O’Leary said Galion taxpayers would not be responsible for paying for repairs.
“This will be a triple-net sort of deal where the tenant will be expected to pay for utilities, taxes and insurance. That’s paid by the tenant,” O’Leary said.
The mayor said the worst-case scenario would be that the city would not be able to find a tenant, in which instance the city would be responsible for paying the building’s utility costs, around $30,000 annually.
“I don’t think that will happen. I’m optimistic for Galion by nature,” O’Leary said.
The resolution passed its final reading 6-1, with Bean casting the dissenting vote.
Council member at-large Jon Kleinknecht and third ward council member Michael Richart were auded by both Council president Carl Watts and the mayor during Tuesday’s meeting, which marked their last.
Gail Baldinger, Kleinknecht’s replacement, and Jim Hedges, Richart’s replacement, will be sworn into office during a special meeting Wednesday, Dec. 30. A reorganizational meeting is scheduled for Monday, Jan. 4. Both meetings will begin at 7 p.m. in Galion’s municipal building.
