TROY — Members of the Troy Loan Review Committee approved a motion for loan support on Wednesday to the newly-formed “Sherwood of Troy, LLC.”
The motion is pending exploration of the city’s legal authority to make the loan, as well as the gathering of further financial documentation from remaining investors. The motion will now move to Troy City Council for consideration.
The partnership is currently in the process of obtaining the Sherwood Shopping Center and its outlots, located at 914-982 N. Market St. in Troy.
Due to current conditions of the center and its lack of tenants, regular commercial bank loans were not available, leaving the team to seek assistance from the city of Troy Small Business Development Revolving Loan Fund (SBD).
The project cost is $2.3 million, which included an initial stabilization phase of $600,000, and $1.7 million for the overall purchase price. The SBD does not currently have an available balance sufficient to cover this request, necessitating a transfer from other reserve funds.
The total financing of the $2.3 million cost was broken down to the committee in four segments.
The first $600,000, or 26.1 percent, is allotted toward private equity in repairs and renovations of the property, with top priority given to the facility’s roof; $300,000, or 13.1 percent, is allotted toward private equity in the purchase; $900,000, or 39.1 percent, is allotted toward a two-year loan with interest-only payments; and $500,000, or 21.7 percent, is allotted toward a second mortgage loan for a 20-year period.
Collateral on the loan will include mortgages on the main property and its outlots, as well as personal guarantees provided by the new owners. Documentation for the collateral is still forthcoming.
Frank Harlow, a partner in “Sherwood of Troy, LLC,” addressed the committee on business plans for the center, including current dealings with Needler’s Fresh Market, as well as negotiations with potential tenants.
“I’ve had many conversations with Michael Needler,” Harlow said. “His intent right now is to turn the market into a liquor and party store, so they intend to downsize. Right now, he’s looking to increase the size of the liquor store and craft beers. Because they have the liquor license, they have an opportunity within the market. They need more shelves and want to expand that.
“The problem right now is that there’s not enough foot traffic to maintain all the produce and meats — they’re probably shrinking out 25 to 30 percent of that every week. Anything that’s perishable, Needler is going to remove.
“He was not aware until recent weeks how much we were developing on the northern end of town, so that excited him a little bit,” Harlow said, indicating reactions to street closures on North Market Street. “He will not commit moving forward until we get to autumn and his lease is due. We hope Needler’s will stay in the same space they’re in.”
The Needler’s lease is due in September.
“We’re in negotiations with somebody to take the center space,” Harlow confirmed. “I don’t want to disclose yet who that is, but we have an operator looking at the center space really hard.
“Also, we have full intentions of bringing the movie theater back to life. We’re working with one of the three major players in the movie theater business to bring the theater back. We’ve also spoken with three other potential tenants who will possibly take the space.”
Harlow expressed that the top priority and most crucial need for the property will be to completely replace the roof of Sherwood Shopping Center, which leaks considerably and has made much of the shopping space unrentable.
“Everybody in Troy, Ohio knows that the main problem is the roof,” Harlow said. “I’m confident that once the street opens back up and everybody sees the new roof going on, it’s going to be getting a lot of attention. Our intent is to put the new roof on, build out the white boxes inside for new tenants, and then totally reface the front of the building. We want to bring it up to fit today’s standards.“
Harlow also voiced interest in potential construction on the outlots in front of the center.
“Our initial thought was to take the bank down, and put up some fresh buildings on the outlots,” Harlow said. “I’ve been approached by those that think a bank should stay, but we’ll see moving forward.”
Despite questions of legality raised by the committee, the motion was approved pending investigation of legal authority, based upon the importance of showing support for those willing to invest into the community.
“Conceptually, the real problem with that property has been the out-of-state ownership,” said vice chairman J.C. Wallace. “They’ve not reinvested anything into that building. Having it under local ownership is really a godsend, and the fact that you’re interested in putting that much personal capital into the retail market, which has been struggling, is a great sign for the community.”
The committee approved the motion with one amendment to the request — to raise the closing fee to a standard rate of 1.5 percent from the requested 0.25 percent, in order to insure coverage of legal costs.