Customized Real Estate Development Lending for Landmark Property in Central Texas

In a small town south of Austin, lies a city landmark and family heirloom. Since the 1960s, the Dahlstrom family has owned a grain mill in Buda, Texas. Passed down through the generations, four siblings in the Dahlstrom family now own the property. Dodi Dahlstrom Ellis serves as President and her son Saenger Ellis serves as Vice President (pictured below).

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According to Saenger, “Everyone that comes down here has a story about this place and how they worked here, or their uncle worked in the mill, or they would buy grain from Livengoods Feeds when they were kids.”

In 1964, their grandfather took ownership of the property, and they were subsidized to use the property as grain storage for the US government. Upon their grandfather’s death in the 1990s, Gay Dahlstrom, Dodi’s mother became the owner, and she and her husband started renting the space out to hobbyists. 

In the past few years, however, the town and its needs have changed. It’s no longer the farming community it had been in decades past. In keeping with these changes in Buda, the family started to see potential for the property to evolve into a new form: a gathering place for the town that marries the mill’s historical significance with modern design. The family has taken great care to conserve much of the original structure of the buildings and to use recycled and reclaimed materials in the design. 

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The Dahlstrom family imagines the Buda Mill & Grain property “bringing the surrounding community together to savor good food and wine, shop locally, grab a slice of cake, or just meet up with friends to listen to live music under the shade of a giant live oak tree.”

While they had a strong vision and plenty of design inspiration, the family wasn’t entirely sure how to proceed with making this vision a reality. They spoke with several different banks about real estate development, commercial lending, and their unique financial needs, but when their financial advisor recommended Business Bank of Texas to them, they quickly knew they’d found the right fit. 

The personal touch they got working with Business Bank of Texas came as a pleasant surprise to Dodi and her family. This is a factor that was particularly important to their late mother, who always appreciated close professional relationships. As Dodi noted, “We didn’t expect the close relationship we’ve found working with the bank or to have the president of the bank just drop by and visit with us.”

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“We had a hard time figuring out how exactly we were going to do all of it, but we talked to Ed, and he was excited. He told us exactly what we needed to get him and how to move forward. We really appreciated how easy he was to work with. He made it a much more enjoyable process than what we had started out with,” Saenger said. 

After providing all the necessary financial documents to the bank, the family worked with Ed Lette, President & CEO of Business Bank of Texas, to create a personalized plan that allowed them to keep developing the property while taking a conservative financial approach. 

Since the family already owned the property, and because this particular effort is, as Saenger describes it, “larger than a small project and smaller than a large project,” a traditional bank loan was not a good fit. A typical development loan spans two to three years with no repayment until the business is able to open and start generating revenue. 

For this multi-phase project, however, Dodi and Saenger needed a custom commercial lending solutionWhile other banks would consider only a traditional development loan, Business Bank of Texas worked with the family to create a plan that allowed them to renovate and lease out the buildings in phases. This removed the risk of having empty development spaces, and gives them more flexibility in helping prospective tenants. 

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As each stage is completed, Buda Mill & Grain is able to lease out the renovated space to tenants and start generating income. At that point, the customized real estate loan is converted into a typical mortgage. This systematic, conservative approach fits well with the family’s business goals for the development of the property. 

The Dahlstrom family, unlike other developers, does not hope to build this property and sell it; they want to be part of the community and watch the Mill development grow into its newest form for the foreseeable future. The personal touch they’ve gotten working with Business Bank of Texas has allowed them to realize their goals for this heirloom property. 

If you have a business plan that needs a unique solution and a personal touch, contact us to discuss how we can help you achieve your goals. 

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Ed Lette

Business Bank of Texas

Ed Lette is founder, president and chief executive officer of Business Bank of Texas, N.A. and serves as chairman on the company’s Board of Directors. Serving as a licensed CPA since 1983, Ed’s extensive experience in the banking industry has led him to become the founding president of four national bank charters including Business Bank of Texas, N.A., and the chief financial officer of five national banks during his 45 year career. Ed serves as director of the Texas Bankers Association District 4, chairman of the Executive Advisory Council to the School of Business at Texas Lutheran University, and is a life member of the Texas Association of Business.

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