GONZALES, Texas, Sept. 1, 2010 (GLOBE NEWSWIRE) -- After years of research, Henry Schmidt took the opportunity to purchase two storage unit facilities, located next to each other, and start a new career as a business owner.
Mr. Schmidt worked in a sales manager position for Midstate Environmental Services, a used oil collection company, before branching out on his own. Mr. Schmidt said he saw the storage unit industry as an investment opportunity, and realized there was great demand for additional secure storage units in the city of Gonzales.
"I contacted a couple banks in the area for information about a small business loan," said Mr. Schmidt. "When the opportunity arose to buy one of the properties, Lone Star Bank said they had an economic development program that I might qualify for, and I could possibly get some grant money that would help me buy both properties. I was all ears when I heard about that."
Mr. Schmidt has been a long-time customer of Lone Star Bank, utilizing them for his personal banking needs. When he began looking into small business loans, Gary Mobbs, vice president and branch manager of Lone Star Bank in Gonzales, walked him through the process and introduced him to the Federal Home Loan Bank of Dallas (FHLB Dallas) and its Economic Development Program (EDP) and Economic Development Program Plus (EDPPlus).
Through its EDP, FHLB Dallas provides favorably priced advances to its member institutions, such as Lone Star Bank, in order to support economic development and community revitalization projects that are qualified by location, income, or consumer demographics. If a member institution is approved for an EDP advance, the member's customer may then be eligible for an accompanying EDPPlus grant. EDPPlus grants are noncompetitive and available on a first-come, first-served basis to promote and enhance small business development in underserved areas or to underserved populations. Through its member institutions, FHLB Dallas has awarded $1 million in EDPPlus grants in 2010.
In Mr. Schmidt's case, he was able to qualify for a loan through Lone Star Bank, and a $25,000 EDPPlus grant from FHLB Dallas, which helped him purchase the two storage facilities.
"EDP and EDPPlus have been great tools for us to help develop new business and expand existing business within our community," said Mr. Mobbs. "Mr. Schmidt was a great candidate for the program because he is a small business owner that is improving and expanding an existing business in order to better serve our community."
David Kapavik, president of Lone Star Bank S.S.B., confirmed the value of these programs. Mr. Kapavik said, "We share a great working relationship with FHLB Dallas, which in turn helps our customers. The economic development programs have enabled many small businesses with limited resources to obtain grant funds along with a reasonable rate loan."
Since Mr. Schmidt was able to purchase the two neighboring facilities, each from a separate owner, he incorporated the two together by adding a security fence around the entire property. He has also made improvements such as adding an electric security gate with individual access codes, and replacing all the doors to the individual units. Mr. Schmidt also built an office on the property, added boat and trailer storage, created accessible parking, and is in the process of installing security cameras. He hopes to build additional units in the future and offer covered RV spaces.
Apache Storage opened in full operation in July 2010, offering a total of 122 units, 117 of which are 10x12 ft. and five are 10x24 ft., plus 30 rental spaces for boats, recreational vehicles, and trailers. Apache Storage is currently about 40 percent occupied, and Mr. Schmidt says with the installation of security cameras and word-of-mouth referrals, he hopes the facility will be full by the end of the year. Apache Storage is the only high security storage facility in the city of Gonzales, and is located next to an adjoining new residential neighborhood and is easily accessible from town. Eventually, Mr. Schmidt hopes to build and operate similar facilities throughout South Texas.
About the Federal Home Loan Bank of Dallas
The Federal Home Loan Bank of Dallas is one of 12 district banks in the FHLBank System created by Congress in 1932. FHLB Dallas, with total assets of $57.1 billion as of June 30, 2010, is a member-owned cooperative that supports housing and community development by providing competitively priced loans and other credit products to more than 900 members and associated institutions in Arkansas, Louisiana, Mississippi, New Mexico, and Texas. For more information, visit the FHLB Dallas web site at fhlb.com.
The Federal Home Loan Bank of Dallas logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3013
CONTACT: Federal Home Loan Bank of Dallas Corporate Communications (214) 441-8445 www.fhlb.com