Red Cross looks to catch next stage
by Mike Kroll
When disasters strike, large or small, the agency many of us look to for help is the American Red Cross. But when misfortune strikes the Red Cross, who can they turn to? In the case of the Western Illinois Chapter of the American Red Cross they are turning to the Galesburg community to help them out of a surprise financial dilemma. On March 17th, less than two months after water and smoke from the O.T. Johnson’s fire severely damaged their building, local Red Cross officials met with a representative of Wells Fargo Bank for what they expected to be a routine renewal of their mortgage loan on their Main Street building. According to Executive Director Lynne Tyler, they were shocked to learn that the bank was not going to renew their mortgage and instead gave the Red Cross until March 31st to present a plan to pay back the outstanding balance of $277,000.
Local Red Cross officials went into high gear to put together a fund raising campaign entitled “Burn the Mortgage” with the goal of raising $305,000, enough cash to pay off Wells Fargo and be rid of their mortgage payments forever. The campaign began April 18th and is co-haired by Dave Beversdorf and Al Urena. While repairs to their building still aren't completed and they await a new roof and west wall, Red Cross volunteers are asking local businesses and individuals to give whatever they can toward paying off the mortgage. “Every penny we raise through this campaign will go directly toward paying off the mortgage,” stated Tyler. “Frankly we were blindsided by this move by the bank and it could hardly have come at a more inconvenient time. Fortunately, our board was already committed to paying down the mortgage principal as soon as possible; it just hasn't been possible.”
The Red Cross board purchased the Main Street building in 2000 for $159,000 (including the parking area at its rear) and subsequently has invested a total of “nearly $800,000” in remodeling and improvements. The original mortgage was a note amortized for 15 years on $365,000 with a balloon payment after five years. Initially the monthly payment was about $2,800 “which was still less than we had paid in rent before purchasing this building” according to Tyler. About three years ago, when interest rates tumbled, the Red Cross refinanced their mortgage and brought the monthly payment down to $1,614. “Since we have held this mortgage, we have never missed a monthly payment or even been late. Both the original and the refinanced loans were handled with local Wells Fargo employees but apparently our account is no longer the responsibility of anyone in Galesburg.”
At the March 17th meeting, Tyler and members of her board met Stephen Swadinsky of Wells Fargo's Credit Management Group out of Fort Wayne, Ind. for the very first time. “He told us Wells Fargo no longer wished to hold our mortgage,” explained Tyler. “We are continuing to make our monthly payments to the bank but our mortgage has not been renewed and is being carried on a month-by-month basis at this point. We don't know how much time we have to raise the money but we are already anticipating the need to seek a new mortgage from some other source until we can raise sufficient funds in our campaign.”
Exactly why Wells Fargo has done this remains a mystery to Red Cross officials. When they asked to discuss the matter with local Wells Fargo employees, Swadinsky told them, “The local people are no longer the people you need to deal with.” Now that the new campaign has been started, local Red Cross officials will likely began exploring refinancing options with other local banks. “We are all members of western Illinois and dedicated to supporting the local community as part of our mission, but right now we badly need community financial support. Every dollar we now pay toward the mortgage could someday soon be used instead to assist victims of disaster, large or small, local or otherwise. Whether it be a fire, tornado, hurricane or tsunami the Red Cross is dedicated to assisting victims but we can't continue to do that without support from the Galesburg community.”