Business / Government

Maywood to Pay Down $220K Loan to, Sever Ties with, Seaway Bank

Seaway Bank

The Maywood branch of Seaway Bank and Trust. | Google Earth

Thursday, October 27, 2016 || By Michael Romain || @maywoodnews

The relationship between the Village of Maywood and Seaway Bank, widely considered to be the largest black-owned bank in the Midwest, appears to be headed to an end.

During an Oct. 26 Legal, License and Ordinance Committee meeting, Trustee Ron Rivers said that the bank wants to sever ties with Maywood. The subject was broached during a discussion about the village possibly paying down, in full, the remaining balance on a $300,000 loan it owes the bank.

In 2010, the developer of the Maywood Market grocery store, which has since closed down, approached the village about co-signing a $250,000 loan from Seaway in order to “float cash for operations, according to an August 2015 memo drafted by village attorney Michael Jurusik.

When the developer defaulted on the $250,000 loan in 2011, and when their whereabouts couldn’t be identified by bank officials, Seaway decided to pursue Maywood. 

“That promissory note of $250,000 was not paid,” said Jurusik at a board meeting in April. “Interest has been accruing since 2010.”

The amount of the principal, the interest, late penalties and attorney’s fees totaled more than $300,000, records indicate.

At Wednesday’s LLOC meeting, Village Manager Willie Norfleet, Jr., indicated that the village still owes around $220,000 on that loan — an outstanding balance that he said he would like the board’s approval to pay down in full.

“I would like to pay the full amount off rather than making $10,000 a month payments,” Norfleet said, adding that the money to pay the full amount would come from the village’s Madison/5th Ave. TIF district.

“Would this payoff sever ties with Seaway,” asked Trustee Ron Rivers, “because it’s my understanding that Seaway wants to sever ties with the Village of Maywood?”

Norfleet said that, at a meeting last week, board members were given a handout in which Seaway requested that Maywood “reduce our deposits from the bank to the level where [they don’t] have to be collateralized.

“In other words, they are asking you to take your money out for several months. This issue [of the $220,000 bulk payment] is separate,” Norfleet said.

“You have a loan and you want to pay the loan off independently of positions being taken by the bank. That’s something totally different,” he noted. “Even if you took your money out of the bank and went someplace else, you’d still have to pay that obligation.”

Norfleet added that Seaway, whose lone Maywood branch is located across the street from the police department, has requested that the village reduce its deposits by Oct. 28. He also said that the village treasurer has been in talks with other banks in anticipation of Maywood moving all of its deposit elsewhere.

Seaway Bank officials could not be immediately reached for comment.

In June, Crain’s Chicago Business reported that Seaway Bank & Trust may have had to start raising money in order to stay solvent. As of March 31, Crain’s reported, the financial institution had lost $16 million within the last 15 months.

And in 2013, the Maywood Public Library was forced to close its doors for a few weeks after Seaway Bank had tightened the conditions of a loan. That issue, however, was resolved after bank officials offered the library an extension and an additional line of credit. 

The Board of Trustees is expected to take a binding vote to approve the remaining $220,000 balance at a Nov. 1 regular meeting.

Trustee Melvin Lightford provided the only vote against the motion to move the payment to the regular meeting, while Trustee Isiah Brandon abstained. All other board members voted in favor of the motion. VFP

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2 thoughts on “Maywood to Pay Down $220K Loan to, Sever Ties with, Seaway Bank

  1. Wow! Another no accountability from the administrations from the village of Maywood! I can see why the Maywood Market was shut down in 2010 and it has been six years and it still looks like a vacant lot. Also, when the Maywood Public Library was about to be shut down, it wasn’t Seaway Trust bank that offered the loan to open it, but it was also from the help of Illinois State Representative Mr. Welch. Again, if Maywood wants to move forward and invest in small businesses, there should be a reform with the banks.

  2. Please, let us once and for all, set the record straight and correct this rumor about what happened with the library. Seaway Bank was the ONLY one to GIVE the library money, (in the form of a loan), NO ONE ELSE; except a few loyal library users who supported the library with donations, and by using the Adopt-A-Book program, NO OTHER MONIES WERE RECEIVED FROM ANYWHERE ELSE!

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