An agreement was reached between the trust and council in 2009 to make the loan facility available for redevelopment of some of the 17 heritage buildings it owns in Oamaru.
Since then, the trust has drawn down $240,000 of the loan and is planning to spend another $200,000 renovating the Connell and Clowes building, including creating four bedrooms and three bathrooms on the first floor for the Criterion Hotel, which it also owns.
The renovation included reopening a door between the two buildings and a new stairwell down to Tyne St.
The council's corporate services manager, Carolyn Carter, said security for the loan was over the leasehold interests of the Loan and Mercantile and Criterion Hotel buildings.
The loan used so far has been $170,000 for a kitchen in the Loan and Mercantile building, the purchase of fixtures from the NZ Malt Whisky Company, renovating space at the front of Neill's building for a shop and clearing the trust's bank overdraft.
The loan was interest-free for the first two years, enabling the trust to bring the historic buildings up to a tenantable standard and make improvements to those already tenanted.
The aim was to attract more tenants to the buildings.
