Silver Lake to continue to pursue loan refinance despite higher payment

Silver Lake could re-finance its loan for the purchase of a building on Second Street with its current lender, village President Bruce Nopenz reported at Wednesday’s Village Board meeting.

After the refinance, the monthly payment would increase from about $1,300 to about $1,700, but a looming $200,000 balloon payment due in the  current loan in 2018 would be eliminated, Nopenz said. The new loan would have a 15-year term.

Nopenz said when he first approached Peoples Bank about refinancing, he was told that the bank did not typically structure commercial loans like a 15-year home mortgage, which is what the village sought. But eventually the bank agreed to terms the village sought.

The new loan would have an interest rate of 3.6 percent.

The village took out the loan to purchase a former day care building on Second Street to use as a branch for the Community Library, a joint library between Silver Lake, Salem, Paddock Lake, Randall and Twin Lakes. Originally, the village expected the other Community Library municipalities to contribute $50,000 each toward the project; $250,000 was borrowed to cover the $200,000 building purchase and $50,000 in renovations. But only Salem agreed to contribute that money and even that board has subsequently held up completing the contribution. The library already maintains branches in Salem and Twin Lakes. Its small Silver Lake branch is losing it’s lease as of Sept. 1.

Now Silver Lake has turned to trying to rent the building to the library. A joint library cannot own real estate, but can pay rent.

Nopenz has been advocating for the refinance as giving the village more flexibility regardless of whether the lease agreement with the library can be worked out.

“It would make sense to re-finance that to stretch that out some more,” Nopenz said.

Other board members also seemed to be in favor of the refinance.

“Go for it,” said Trustee Roger Johnson, who also emphasized that negotiations with the library need to continue.

“The reason we bought this was for the library,” Johnson said. “We’re running out of time on that.  We should be talking to the library board to see what we’re going to do.”

Nopenz said knowing the refinance numbers should help the negotiations move forward because the village now knows more about its true costs.

“The library is interested in the building, but there are details that need to be worked out …” Nopenz said.