National City Bank of Cleveland agreed to change the name on the note it held from the former owners, Temple Associates, to The Civic Foundation, Inc. A more difficult challenge to the Foundation was the balloon payment of almost $600,000 due on April 1, 1995. Prior to meeting with the bank representatives, the Civic Board requested that its architects estimate the cost of tearing down The Civic. The Board's thinking was that the bank, in the event of a foreclosure, would be interested in demolishing the building and selling the land for redevelopment. The demolition cost was $550,000, so the bank would be faced with a loss of more than one million dollars in lost income and expenses for a three-acre plot of potentially developable land. At $333,000 per acre, the land would be extremely overpriced for the neighborhood. (Vacant commercial land in the neighborhood was selling for approximately $50,000 per acre,)

The first meeting with the bank officials was held in March 1995. The bankers were willing to discuss a 12 to 18 month extension. The Board felt that it wanted a permanent solution to the loan issue rather than have to face the annual balloon payment issue. National City Bank - due to bank mergers, the third bank to hold the note - was reluctant to continue the loan, believing it to be a non-performing loan that should never have been granted in the first place. Faced with the demolition costs and the backup of the three guarantors, the bank officials eventually relented. Since the cash flow of the Civic didn't allow it to pay a regular monthly principal and interest payment out of its funds, the proposal to the three guarantors was that they would each make a tax deductible donation monthly to The Civic Foundation, depending on the cash needs of that month. Since the bank had full recourse to the guarantors for the loan balance, this arrangement was satisfactory to the investors, who had few alternatives. The bank agreed to a one-year extension to April 1996.

The Civic Foundation was no healthier financially in April 1996 than it had been in the previous year. The guarantors by this time were getting weary of the monthly calls for cash and were looking for a better solution. The bank was looking for its money rather than another loan extension and the Civic was looking for a long-term loan to avoid a crisis every April. The City of Cleveland Heights was also looking for a permanent solution and was unwilling to release any funding to the Civic until the permanent loan solution was in place. Reluctantly, the bank granted another one-year extension in April 1996. Then, unexpectedly, one of the three guarantors stopped making donations to the Civic to pay the monthly mortgage. As a result, the Civic was not able to make its July or August mortgage payments. In August, the president of the Civic Board invited the bank's leadership to sit down with board to work out a solution. The Board hoped that the bank might be willing to reduce the interest rate of the loan by making a charitable donation to the Civic. The bank responded in a formal letter informing the Civic that it was now in default of the loan agreement.

During the fall of 1996, several meetings were held between the Board of the Civic, the guarantors, and the City Manager and Development Director of Cleveland Heights, all looking for a strategy to convince the bank to grant a permanent loan to the Civic. Because the guarantors were no longer willing to make monthly donations to the Foundation, some other solution was necessary. The City expressed a willingness to participate financially in a solution. In early 1997, a meeting was set up in the offices of the George Gund Foundation, one of the early funders of The Civic Foundation's planning phase. The meeting included representatives of the Civic Foundation, the City of Cleveland Heights, the Gund Foundation, the Cleveland Foundation, and the guarantors. At that meeting, the City of Cleveland Heights and the Gund Foundation representatives agreed to take to their board and city council, respectively, a proposal to work out a linked deposit program with the Civic. The terms of this proposal were that each of the parties would deposit a sum of money in National City Bank. The interest from these deposits would accumulate in the Civic Foundation's account at National City and would be applied each month to the monthly mortgage payment. This would enable the monthly payments to be low enough to fit within the budget of the Civic.

In July 1997, the Civic Foundation and the George Gund Foundation signed an agreement calling for the Gund Foundation to deposit $250,000 in a Certificate of Deposit that would mature in July 2007, when the Civic's loan would be paid off. The CD would bear interest at 6.06 percent; 5.06 percent would be applied to the Civic's debt service. This linked deposit would produce about a $1,000 per month contribution to the monthly mortgage payment. On October 31, the City of Cleveland Heights followed suit, signing an agreement to deposit $100,000 at six percent interest. The City's CD would allocate five percent to the Civic's debt service. This would contribute another $400 to the monthly mortgage. With these two linked deposits, the Civic's cash flow would now allow it to make its monthly payments without assistance from the guarantors. The agreement with the city also approved the release of the almost $400,000, as detailed in the following section, in Community Development Block Grant funds that had been allocated but not released to the Civic.