Spencer extends town hall financing at request of USDA

Published 12:02 am Thursday, January 20, 2022

SPENCER — The Spencer Board of Aldermen on Tuesday approved extending its interim financing deal for its new town hall because the U.S. Department of Agriculture is behind on its paperwork.

The town secured an interim loan from Truist for $2.8 million of the $3.9 million town hall project in November 2020. The deal is short-term financing intended to be repaid via a 30-year loan through the USDA by Feb. 3.

The board approved a 60-day extension with the financial impact of about $7,254 in additional interest cost and a legal revision cost anticipated to be less than $5,900. The Truist Loan carries an interest rate of 1.54%.

The USDA does not cover any of the additional cost and the money will come from the existing project budget.

“We have some lines in there for legal fees,” Town Manager Peter Franzese said.

Franzese said the department needs an updated appraisal on the property and the town has been trying to get that process complete for months. Franzese said the person who performed the appraisal on the building several years ago passed away and appraisers are bogged down at the moment.

Franzese said the town does not anticipate the process taking more than 60 days, which would result in fewer interest payments to Truist and the legal fees may be less than expected.

Franzese said the board made it clear they do not want the process to drag on because it is an extra cost.

The town held a grand opening and open house at its new town hall in December to coincide with its inaugural Winterfest. Construction on the project began earlier in 2021 and staff began to move in proper in December as well.

The project had several change orders over the course of its construction, but it never went over budget. Notably, the town had to repair discovered structural issues on the property and work with Duke Energy to change the electrical delivery to the new facility.

The town anticipated being able to use existing heating and air units in the facility which were not operational with $24,000 left in its contingency fund for the project and contractors were successful getting those units up and running.

About Carl Blankenship

Carl Blankenship has covered education for the Post since December 2019. Before coming to Salisbury he was a staff writer for The Avery Journal-Times in Newland and graduated from Appalachian State University in 2017, where he was editor of The Appalachian.

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