From Santa’s Workshop to Day Care Center, MHT Loans Bridge the Gap

by Anne Raines, Capital Grants and Loans Administrator

Franklin Hall

Franklin Hall

In tiny, charming Chesapeake City, where town leaders and residents cherish their history as the birthplace of the Chesapeake & Delaware Canal, Franklin Hall is a significant place. Home to Santa’s workshop in December and boutiques throughout the year, the hall has a storied past, starting as Chick’s Tavern in the 1700s then as a Masonic Hall. When it needed renovation, the nonprofit Chesapeake City District Civic Association turned to the Maryland Historical Trust for help.

The project received an MHT capital loan to repair wood windows, most original to the building, and add storm windows, a significant improvement in comfort and cost considering the often sharp breezes off the canal.

In 2013, Baltimore business owners purchased the Rolando-Thom House, a Gothic Revival cottage in the city’s Bolton Hill neighborhood, with plans to convert it into a nursery. Designed and built in 1848 by Robert Cary Long Jr., Baltimore’s first professionally trained native-born architect, the house had been home to a social services agency.  But when it appeared on the market, the spacious rooms and the large lot – big enough for outdoor play space – appealed to owners of the Bolton Hill Nursery, which had been hoping to purchase new space.  Loan funds committed by MHT helped close a gap in rehabilitation financing and ensure completion of the project.

Bolton Hill Nursery

Bolton Hill Nursery

For decades, MHT’s Capital Loan Program has made a significant difference in scores of projects in dozens of communities across Maryland.  Along with tax credits and grants, it is an important tool in MHT’s and MDP’s toolbox of initiatives to protect the buildings that tell of our shared past and spur investment in historic communities. Loan program funds allow MHT to fund one to three projects a year to borrowers – nonprofit organizations, local governments, businesses and individuals. The program provides low-interest loans for rehabilitation, acquisition, refinancing or predevelopment costs.

With funding in the $100,000-$250,000 range, MHT capital loans can be just the boost needed to make a project financially feasible. It may be the missing piece to complete part of a rehabilitation project or it may provide an affordable way for a group such as a nonprofit to take on a substantial capital project.

MHT’s Capital Loan Program itself has a long history, starting in 1973. In 40 years, the program has assisted 85 projects and provided more than $8 million to projects as diverse as historic skipjacks, train stations, museums, a blacksmith’s shop, commercial buildings and significant dwellings.

Payments are repaid into the loan program, providing principal for new borrowers. The program typically also receives a new appropriation from the legislature each year.

The loan program offers several advantages. The interest rate is tied to the rate on state government obligation bonds, which is low even compared to conventional lenders. The program seeks to fund projects that have difficulty securing funding through other channels or that have exhausted other funding options.  Doubtless many property owners seeking funding for their rehabilitation projects have been turned down by a bank because of the nature and condition of the property itself – factors that MHT, as the lender, might see as an opportunity rather than an obstacle.  Also, the program favors projects that have a high level of public benefit, which means that nonprofit organizations such as historical societies and museums find a good fit with their mission to make historic properties accessible and available to the public.

As with any funding source, the loan program has requirements and restrictions to consider.  Any property assisted with an MHT loan has to qualify as historic – at a minimum, listed in or eligible for listing in the National Register – and the property owner has to convey a perpetual preservation easement on the property to MHT.   The rehabilitation of the property has to meet the Secretary of the Interior’s Standards for Rehabilitation and must be approved by MHT.  Finally, the program is not geared toward assisting rehabilitation projects that do not provide a public benefit; for example, private residences are typically only competitive if the property is particularly significant.  Other restrictions or requirements may apply. Approval times typically range from six to nine months.

If you think your project may be a good candidate for an MHT Capital Loan, please contact Anne Raines, MHT’s Capital Grants & Loans Administrator, with details about the property and the proposed use of funds.

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