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Ventura County Roundup | East Valley / SIMI VALLEY

City Reduces Debt of Boys & Girls Club

November 28, 1998|S.J. CAHN

The City Council has agreed to forgive the Simi Valley Boys & Girls Club nearly $600,000 in interest on a loan, reducing the club's future payments by nearly $10,000 monthly.

"I think . . . what they have tried to accomplish has been considerable," said Mayor-elect Bill Davis, echoing the sentiments of a unanimous council that agreed to ease the club's financial burden when it begins repaying a $1.5-million loan in June 2001.

The debt reorganization was not as generous as one proposed by the club, but club President Brian Troop said the board of directors was pleased by the council's decision.

The loan grew out of a 1990 agreement between the city and the club in which the city decided to help pay for construction of a new 20,000-square-foot building for the club three years ago.

Under that agreement, the city paid for half of the $3-million construction cost and loaned the other half to the club, located at 2850 Lemon Drive.

The club was given 45 years to repay the loan at an interest rate of 8%, beginning in May 1996.

The club, however, opted to defer the start date for repayment by five years. With interest accrued during that time, the club would have had to repay $2.1 million.

The club has an annual budget of more than $1 million.

Under the new terms approved this week, the city will receive a $500,000 payment from the club in January, lowering the remaining balance of the loan to $1 million.

The city, in turn, will reduce the interest charged on the balance and forgive the $565,060 in interest accumulated during the deferment period.

As a result, in May 2001 the club will owe the city $933,500 instead of $2.1 million. Monthly payments will be $4,700 instead of $14,400.

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