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. JohnsonÕs 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 ÒBurn the MortgageÓ 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. ÒEvery
penny we raise through this campaign will go directly toward paying off the
mortgage,Ó stated Tyler. ÒFrankly 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.Ó
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 Ònearly $800,000Ó 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 Òwhich was
still less than we had paid in rent before purchasing this buildingÓ 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.
ÒSince 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.Ó
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. ÒHe told us Wells Fargo no longer wished to hold our
mortgage,Ó explained Tyler. ÒWe 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.Ó
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, ÒThe local people are no longer the people you
need to deal with.Ó Now that the new campaign has been started, local Red Cross
officials will likely began exploring refinancing options with other local
banks. ÒWe 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.Ó
04/27/06