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5. EDSR 04-08-2013 Elk REQUEST FOR ACTION River TO ITEM NUMBER Economic Development Authority 5. AGENDA SECTION MEETING DATE PREPARED BY April 8, 2013 Clay Wilfahrt,Assistant Director of Economic Development ITEM DESCRIPTION REVIEWED By Consider Downtown Revitalization Microloan Application for Jeremy Barnhart, Deputy Director, Blue Egg Market Community Operations and Development REVIEWED BY ACTION REQUESTED Consider and approve Downtown Revitalization Microloan Application for Blue Egg Market BACKGROUND/DISCUSSION The attached staff report to the EDA Finance Committee dated March 29,2013, and committee meeting minutes provide background regarding the Micro Loan request. The Downtown Revitalization Microloan program is available to business and property owners in the Downtown District primarily for the rehabilitation and restoration of older buildings as well as new business development. Blue Egg currently occupies a location in downtown, and they are proposing to use the Microloan funds to expand into 707 Main St. where they will offer cakes, fudge, and candy. Blue Egg Market is requesting $74,500 to fund remodeling and equipment. The applicant plans to attend the EDA meeting and respond to any questions about the project. The EDA Finance Committee recommends the EDA approve the Downtown Revitalization Microloan for Blue Egg Market with the following terms and conditions: • $74,500 at 2%interest, 10 year term, 10 year amortization • EDA to secure personal guarantee • EDA to obtain second lien position on 707 N Main and 713 N Main, and first position on all equipment FINANCIAL IMPACT The Micro Loan Fund has a current cash balance of$1,221,360 with$252,806 in notes receivable. The EDA is asked to approve the Downtown Revitalization Micro Loan request for Blue Egg Market with the following terms and conditions: IP1 ■ E1E1 INATUREI • $74,500 at 2%interest, 10 year amortization • EDA to secure personal guarantee • EDA to obtain second lien position on 707 N Main and 713 N Main, and first position on all equipment ATTACHMENTS • EDA Finance Committee Meeting Minutes dated March 29,2013 • EDA Micro Loan Fund Policy and Guidelines • Staff report to EDA Finance Committee re: Blue Egg Market Micro Loan Application dated March 29, 2013 Action Motion by Second by Vote Follow Up N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2013\48-2013\Action Requested-EDA 48-13 Blue Egg.docx Elk REQUEST FOR ACTION River To ITEM NUMBER Economic Development Authori Finance Committee AGENDA SECTION MEETING DATE PREPARED BY March 29, 2013 Clay Wilfahrt,Assistant Director of Economic Development ITEM DESCRIPTION REVIEWED By Downtown Revitalization Program Micro Loan Application, Jeremy Barnhart,Deputy Director Blue Egg Market Community Operations and Development REVIEWED BY ACTION REQUESTED Consider Downtown Revitalization Program Micro Loan application for Blue Egg Market and make recommendation to the EDA with conditions as outlined in staff report BACKGROUND/DISCUSSION Blue Egg Bakery is a bakery and sweet shop in downtown Elk River owned and operated by Robin DeWitt of Monticello. Blue Egg currently sells breads,pastries, cakes and donuts. The company plans to use the microloan funds for an expansion project into 707 Main St. The expansion will allow Blue Egg to expand its offerings to cakes, fudge and candy. The business will be a separate entity from the existing store. Mrs. DeWitt is experienced in baking and business ownership. She owned and operated Candy Station in Benson,AZ and Greenstone Stables in Dayton, OH. Mrs. DeWitt is an SAE certified food service manager and has a degree from Le Cordon Bleu. Bruce and Robin DeWitt are requesting a Downtown Revitalization Microloan in the amount of$74,500 to help fund the project. The EDA would obtain a first position on the equipment and a second position on the building. A personal guarantee will also be secured. Bruce DeWitt met with Tom Willett of the Small Business Development Center. Mr. Willett raised some minor concerns regarding the financial statement that were changed to meet his satisfaction. In addition to the financial criteria that must be considered, the Finance Committee must also consider to what degree the applicant satisfies the criteria set forth in the Micro Loan Fund policies outlined below: Micro Loan Criteria-Downtown Revitalization Program • Max. Loan Amount: $74,999 • Interest rate: Fixed at 2% • Equity: 10% or more of project • Term: The maximum maturity date will be determined by the useful life of the improvement and the energy payback achieved. For projects that have a shorter length of payback (2-5) years as calculated 111 E R E I 1 r NATURE according to energy savings, the loans will have an initial maturity of up to 5 years from the date of closing. Longer life improvements (6-15 years) may apply for a longer maturity of up to 10 years. • The loans will be secured by personal and corporate guarantees, and if applicable a lien on equipment financed and subordinate mortgage on the property • Exempt from job creation and wage goals because the loan amount does not exceed$150,000 and does not qualify as a business subsidy by state law Blue Egg Market LLC • Amount requested: $74,500 • Rate requested: Fixed at 2% • Equity proposed: $51,500 • Term: 10-year amortization • The EDA will obtain a second position on the mortgage of 707 Main St,a first position on the equipment and secure a personal guaranty The EDA will consider the Finance Committee's recommendation at their April 8 meeting. If recommending approval, the following terms and conditions will apply: Participation Loan: Not Applicable Loan Amount: $74,500 Interest Rate: 2% fixed Term: 10-year amortization Security: First position on equipment, Second position mortgage on 707 Main St,personal guaranty ATTACHMENTS • Micro Loan Application and applicable attachments • Business Plan Action Motion by Second by Vote Follow Up N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2013\4-8-2013\Blue Egg Sweets EDA Finance RFA 3-29-2013.docx MEETING OF THE EDA FINANCE COMMITTEE HELD AT THE ELK RIVER CITY HALL FRIDAY, MARCH 29, 2013 Members Present: Chad Vitzthum,Larry Toth,Paul Motin,Nate Ovall,Cliff Lundberg,Dan Tveite Members Absent: None Staff Present: Assistant Director of Economic Development, Clay Wilfahrt, Others Present: Bruce DeWitt,Blue Egg Bakery,Tim Dolan and Annie I ckert, Decklan Group,Peter Orluck, Orluck Industries, Dan Bosshart and Lloyd Pson,Preferred Powder Coating 1. Call Meeting to Order �� Assistant Director of Economic Development Clay Wilfahrt cad the meeting to order at 7:30am 2. Consider Downtown Revitalization Loan for Blue Egg Market Mr.Wilfahrt reviewed the staff report. Mr. Lundberg asked if the EDA should seek a position Blue _ existing building. Tim Dolan of the Decklan Group who was working with the applicant s' : f iat the y would be oka y with that. Bruce DeWitt introduced himself and ex�':', ed about Blue E:\:, t4 ery. They just celebrated their first anniversary. He explained that high end: :. ® ,d cakes have be° ® Ming well which led them to the idea of expanding. AV Av The committee discussed the fact that the loan was a 10 y and direct loan. Mr. Oval stated that the baker equipment lasted a ' time. The committee was okay with the term and the fact that the loan was direct. The core ttee lik . e fact that theme'.an was fully amortized. Several members of the c tt c mentioned that it was good to see the applicants had extensive experience in management,. MOVED BY MOTIN AND C�ONDED BY TVEITE TO RECOMMEND APPROVAL OF TH\,� APPLICATION FORA 1 TOWN REVITALIZATION MICROLOAN FOR BLUE EGIBAKERY. MOTION CAR . • 6-0. 3. Consider oan A. Dlicati t s for the For''vable Loan Pro! am—Alliance Machine Orluck Industries Preferred P f Niti wr Coatin Lloyd PetersOn4ad Dan Bosshart of Preferred Powder Coating introduced themselves and explained their business and theirplans to move to Elk River. Commissioner Vitzham noted that he is working with the applicants, and that he would abstain from voting. Mr.Tveite stated that the project fit exactly into what the EDA was looking for when they created the program. MOVED BY LUNDBERG AND SECONDED BY TOTH TO RECOMMEND APPROVAL OF THE APPLICATION BY PREFERRED POWDER COATING FOR A FORGIVABLE LOAN IN THE AMOUNT OF $200,000. MOTION CARRIED 5-0 WITH COMISSIONER VITZHAM ABSTAINING. EDA Finance Committee Minutes Page 2 January,30,2013 Page 2 of 3 Peter Orluck introduced himself and gave an overview of his business and plans for expansion. Mr. Ovall stated that the Bank of Elk River is working with the applicant and he would abstain from voting. Commissioner Toth noted that the business is growing quickly and expressed concern that they may move in the near future. He asked if the EDA had any protection against a business accepting the forgivable loan and then moving. Mr. Wilfahrt stated that under the cit iysiness subsidy policy, any business that accepts a subsidy and moves within five years of accepti that s`ibsidy is subject to repayment and penalties. �� Mr. Motin expressed concern with the low score on the for vale loan s� b . system. Mr. Wilfahrt stated that the forgivable loan scoring system was designe*4 e to differen between applicants than it was to indicate strength of the project. Mr. Wilfahrta€tded that all three app ...N7'", received would score very highly on the abatement scoring system, •: are comp\arable to others 0>0 projects ` the EDA has accepted in terms of job creation, taxab ,�\ye.added,*d the other meas 0 nt criteria. - Mr. Vitzham asked if the EDA or city accepted a state gra s ould the city or EDA be penalized by the state if someone were to accept a forgiv; ble loan and the apps 0 t failed to go through with their project. Mr.Wilfahrt said that he would`- with the state to : ,,hat the recourse would be in that event. , \ \` The committee further recommended that th'yterms ith th terms rovided by the bank. p Y MOVED BY TVEITE`AN\ \ECONDED \ VITZHAM TO RECOMMEND APPROVAL OF THE REQUE� BYO ` CK INDUS' IES FOR A FORGIVABLE LOAN IN THE � AMOUNT OF$2v 0. mo‘, bN CARRIED; -O,WITH COMISSIONER OVALL ABSTAINING. \ Annie D` w O\; Deckll ,\ oup info ` the committee about Alliance Machine and their prop std expansib\\ \\\ h' mittee expresse t1t the sclg sheet may need to be updated to better reflect the strength of the ap tion. A\ \\ Mr.Tveite star that suppcing the Alliance project is an excellent example of how a city can support an existing bus\iii .to encrage economic growth. \\ Mr. Ovall stated that\\e Bank of Elk River is working with the applicant and he would abstain from voting. MOVED BY TVEITE AND SECONDED BY MOTIN TO RECOMMEND APPROVAL OF THE REQUEST BY ALLIANCE MACHINE FOR A FORGIVABLE LOAN IN THE AMOUNT OF $200,000. MOTION CARRIED 5-0 WITH COMISSIONER OVALL ABSTAINING. C:\Users\dhuebner\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\Q7RBTRKC\3 29 2013.doc EDA Finance Committee Minutes Page 3 January,30,2013 Page 3 of 3 4. Consider Revisions to the Forgivable Loan Program Mr. Wilfahrt reviewed the staff report. He noted that there are several businesses that could utilize the forgivable loan if the requirement that businesses be in the manufacturing,high-tech, and industrial sectors was removed. Mr. Vitzham asked whether or not there was a provision to prevent businesses from leaving after receiving the dollars,particularly in leased situations. Mr. Wilfahrt stated that there is a requirement that they stay in Elk River for five years following the business subsidy, otherwise they would be subject to repayment and penalties. Mr. Motin and Mr. Tveite stated concern with removing the restrict e om the program after only one round of applicants. Mr. Vitzham echoed the concern and stated at ",:t6elieved the EDA should keep the program as is. `\� The committee came to a consensus that no changes sld be made to the po It‘. .t this time. \\\\ .\ \\\ \4. Closing \ � F The EDA Finance Committee meeting ended at 9:08 a.m.A` \ \\ Respectfully submitted by, y� vv Clay Wilfahrt Assistant Director of Economic Development \�� \\\ \\ \\\, C:\Users\dhuebner\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\Q7RBTRKC\3 29 2013.doc City of Elk v r Powered by Nature Economic Development Microloan Fund Policy & Guidelines And Application Amended: May 2011 City of Elk River Economic Development Division 13065 Orono Parkway Elk River,MN 55330 763.635.1040 www.elkrivermn.gov/economicdevelopment/tools ELK RIVER ECONOMIC DEVELOPMENT MICROLOAN FUND POLICY & GUIDELINES PURPOSE The Economic Development Authority for the city of Elk River (EDA) recognizes the need to stimulate private sector investment into manufacturing facilities and equipment in order to create new jobs,boost productivity and retain existing jobs for local residents.Additionally, the need exists to encourage investment in the expansion and/or rehabilitation of commercial and retail buildings in order to maintain the economic viability of Elk River's Downtown District. Subsequently, the purpose of this program is to provide low interest,long-term (i.e.greater than one year) loans as incentives for industrial development within the city of Elk River and to encourage commercial and retail business owners in the Downtown District to rehabilitate their existing buildings. II. LOAN PROGRAMS In order to meet the economic and community development objectives of the EDA, three distinct loan programs exist within the Microloan Fund to promote business growth in Elk River. Industrial Incentive Program Purpose: The purpose of the Industrial Incentive Program is to encourage industrial and high technology business development that supports the tax base and brings quality jobs to the city. Amount: Up to $100,000 of secondary financing not to exceed 20% of the project cost. Equity: Must have private-sector commitments for 50% of the project cost. Borrower must provide 10% or more of project financing. Rate: Fixed;2 points below the lowest prime rate published in the Wall Street Journal the day the loan is closed, or 3%,whichever is greater. Term: Financing with a balloon payment in 5-years. The balloon payment must not be longer than the balloon payment of the participating bank. Loans may be amortized up to the following limits: 20-years on real estate uses; 10-years on equipment uses. Extension: In the event that the Borrower is unable to obtain conventional financing to replace the Microloan at the end of five years,the loan may be extended up to two additional years at a market rate of Page 2of15 t i w E 1 1 1 NAME interest. Criteria: Borrower must be an industrial or high technology firm and create or retain one new full-time job for each$20,000 loaned within 2 years. Said jobs must pay a minimum wage of$10.00 per hour excluding benefits required by law. Loans of$75,000 or more shall meet the city of Elk River Business Subsidy Policy for the creation of new jobs at a minimum wage of$15.00 per hour excluding benefits required by law, as well as a 5-year location requirement. In the case where the multiple sources of public financing are requested (e.g. Microloan and Tax Increment Financing) job creation goals shall not be double-counted. Borrower must comply with the provisions of the city's Industrial and Business Park zoning ordinances as applicable. Downtown Revitalization Financing Program Purpose: The Downtown Revitalization Financing Program is available to business and property owners in the Downtown District(DD) primarily for the rehabilitation and restoration of older buildings,as well as new business development. Amount: Up to$74,999 of secondary financing not to exceed 40% of the project cost. Equity: Must have private-sector commitments for 50% of the project cost. Borrower must provide 10% or more of project financing. Rate: Fixed at 2%. Term: Financing with a balloon payment in up to 5-years. Loans may be amortized up to the following limits: 20-years on real estate uses; 10-years on equipment uses. Extension: In the event that the Borrower is unable to obtain conventional financing to replace the Microloan at the end of five years, the loan may be extended up to two additional years at a market rate of interest. Criteria: At a minimum,20% of Microloan dollars must be used for the improvement of the building facades,with exceptions to be considered when it appears the facade improvements are not necessary. Financing of leasehold improvements will be considered at a limit of$25,000. Page 3of15 ! 1 ■ E l E 1 I t INAURE Borrower must be located in the Downtown District(DD). Loans must be supported by sufficient collateral,which may include personal assets and guarantees. Energy Efficiency Improvement Program Purpose: The Energy Efficiency Improvements Program is available to property owners of commercial or industrial buildings in Elk River to provide capital to businesses to invest in energy efficiency and improve their profitability through reduced energy costs and enhance their ability to retain and create jobs. In addition, the program helps the city of Elk River use energy conservation as an economic development tool. Amount: Applicants may apply for the cost of improvements up to $74,999 Eligible Uses: Energy efficiency measures installed in or on a building include: • Facility systems optimization (commissioning/re-commissioning) • Facility systems control improvements • Process efficiency improvements (CenterPoint Energy) • Lighting efficiency improvements • Heating,ventilation and air conditioning system modifications • Exterior envelope improvements • Motor and pump efficiency improvements • Ground-source heat pump systems used to heat or cool a facility • Installation of equipment or devices that use renewable energy sources to generate electricity or heat or cool a building including solar electricity (photovoltaic),wind turbine or solar thermal. Equity: Must have a minimum of 10% equity provided by the borrower. Rate: Fixed;2 points below the lowest prime rate published in the Wall S treet Journal the day the loan is closed, or 3%,whichever is greater. Term: The maximum maturity date will be determined by the useful life of the improvement and the energy payback achieved. For projects that have a shorter length of payback(2-5) years as calculated according to energy savings,the loans will have an initial maturity of up to 5 years from the date of closing. Longer life improvements (6-15 years) may apply for a longer maturity of up to 10 years. Criteria: Applicant must agree to energy audits conducted under the utility company's Conservation Improvement Program (CIP). If warranted, engineering studies then are performed on facilities with conservation Page 4of15 1 ■ E R E I 1 1 INA1UREI opportunities under the utility company's CIP Program. Proposed energy efficiency improvements that do not qualify for the utility's prescriptive rebate program will be reviewed and approved by the utility company servicing the upgrade measures (e.g. Elk River Municipal Utilities, Connexus,CenterPoint) along with a letter indicating eligible utility rebates. Utility rebates as applicable will be assigned to the Elk River EDA and applied toward principal repayment of the loan. An Elk River Energy City Commission member will be asked to participate in the EDA Finance Committee review and recommendation of the application. The loans will be secured by personal and corporate guarantees,and if applicable a lien on equipment financed and subordinate mortgage on the property. Loans are not transferrable. Installation must be certified through a licensed contractor and electrician. New construction is eligible when participating with a utility company rebate program. Eligible costs shall include only incremental costs over industry design standards. III. USES 1. Permitted Fund Uses: a. Building construction b. Land acquisition c. Machinery d. Furniture, fixtures,and equipment (FF&E) e. Renovation and modernization of buildings f. Exterior renovation of retail,commercial and industrial buildings g. Public infrastructure needed for economic development expansions h. Investment real estate with a minimum of 50% of the space pre-leased 2. Ineligible Fund Uses: a. Expenditures for the construction and/or renovation of residential units b. Working capital c. Refinancing of existing debt d. Inventory IV. BUSINESSES ELIGIBILITY Any project meeting the above criteria,and located or proposed to be located within the city limits of Elk River as defined by this program,may be eligible for an Economic Development Microloan as further defined herein: Page 5of15 1 1 ll E a E 1 / 1 [NATUREJ • Business must be a for-profit corporation,partnership,or sole proprietorship. • Business must be a small business as defined by the Small Business Administration (SBA). • Business must have a positive net worth. • Religious,political,and pornographic enterprises are not eligible to use the Economic Development Microloan Fund. V. MICROLOAN FUND TERMS & CONDITIONS Loan Structure All Economic Development Microloans shall be structured as participation loans and serviced by the project's primary lending institution,rather than as a direct loan, unless otherwise approved by the EDA Finance Committee. Such an arrangement allows for the central distribution and collection of funds and simplifies the financing process for all parties involved.A participation agreement will be signed by the borrower,primary lender and the EDA. The EDA may require additional agreements to be signed by the borrower (i.e. security agreement,personal guarantees,business subsidy agreement). Simultaneous Microloans The simultaneous use of different Microloan Fund Programs by any one borrower or for any one project is prohibited. Call of Loan A loan shall become due and payable in full if a business relocates outside of the city of Elk River prior to the maturity date of the loan. Late Payment Charge A late payment charge of 8% of the installment amount may be enforced. VI. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS All buildings which public funds will be used for construction or renovation are to be brought into conformance with city ordinances and state building codes. Repairs may include the following systems and portions of real property: a. Mechanical heating,plumbing, and electrical b. Structural;including the facade of the structure and energy related improvements. c. Hook-up to city services (i.e.water,sewer) d. ADA (Americans with Disabilities Act) improvements VII. LOAN SECURITY AND GUARANTEES Applicant must be able to secure the loan by providing the EDA with a minimum of a subordinate mortgage upon the building and/or assets or other approved collateral. Page 6of15 R 1 u E 1 11 f 1 INALUREI Applicant must demonstrate the financial means to repay the loans,as determined by the Economic Development Authority. Whenever possible,personal guarantees will be made part of any loan agreement. Key person life insurance may be required as determined by the EDA Finance Committee based on loan amount and company ownership partners. VIII. TIMING OF PROJECT EXPENSES No project should commence until the Elk River Economic Development Authority has approved the loan application. Any costs incurred prior to the approval of the loan application are generally not eligible expenditures. No building construction should commence until the required city permits are secured. The applicant will be responsible for all legal,recording,and other fees required for protection of a security interest in the loan,payable by a non-refundable 1% processing fee,which is paid at the time of application. In addition to the non-refundable 1%processing fee,all legal and filing fees shall be paid by the borrower at loan closing. IX. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL 1. All applicants shall first contact a primary lending institution to determine if additional equity is needed,and if so,how much. 2. The applicant and the primary lender shall then meet with city staff to obtain information about the Microloan program,discuss the project, and obtain application forms. 3. The applicant shall complete and submit an application form to the city,along with a processing fee of 1% of the loan request. (The fee is used to cover processing expenses and will be returned only if application is denied.) The applicant must provide evidence of their ability to meet the equity requirements or provide a letter of commitment for conventional financing from the primary lending institution. 4. The EDA is a governmental entity and as such must provide public access to public data it receives. Data deemed by Applicant to be nonpublic data under State law should be so designated or marked by Applicant. See Minn. Sat. Sections 13.59, Subd. 1,respectively. 5. The application will be reviewed by the city staff to determine if it conforms to all city policies and ordinances and to consider the following: a. The availability and applicability of other governmental grants and/or loan programs. Page 7 of 15 1I ■ ERE , I ► INALUREI b. Whether the proposed project will result in conformance with building and zoning codes. c. Whether it is desirous and in the best interests of the public to provide funding for the project. 6. With written permission granted by the applicant,the application will be submitted by city Staff to the Small Business Development Center (SBDC) as advisory consult for staff and EDA Finance Committee. Applicant will be asked to execute a Release of Information form with SBDC. To make an appointment with the SBDC, call 320.308.4842. 7. The EDA Finance Committee and EDA Commissioners will review each application in terms of its consistency with the goals of the city's Comprehensive Plan and Economic Development Strategic Plan and in relation to the project's overall impact on the community's economy. Downtown Revitalization Program applications will also be reviewed by a Housing&Redevelopment Authority Commissioner in conjunction with the EDA Finance Committee. Energy Efficiency Improvement Program applications will also be reviewed by an Energy City Commissioner in conjunction with the EDA Finance Committee. The EDA Finance Committee will evaluate the project application in terms of the following: a. Project Design -Evaluation of project design will include review of proposed activities, time lines and a capacity to implement. b. Financial Feasibility-Availability of funds,private involvement, financial packaging and cost effectiveness. • Appropriate ratio of private funds to Microloan funds. • Sufficient cash flow to cover proposed debt service as demonstrated by financial statements and projections. • Ability to demonstrate a positive net worth. • Letter of Commitment from applicant pledging to complete the project during proposed project duration,if the loan application is approved. • Letter of Commitment from other financing sources stating terms and conditions of their participation in the project if applicable. • Sufficient collateral. c. All other information as required in the application and/or additional information as may be requested by the Economic Development Authority. d. Project compliance with all city codes and policies. e. Program Objectives - In addition to quality job and wage Page8ofl5 P S I E 1 E 0 1 1 NA E creation/retention requirements, the applicant must meet all Microloan Fund criteria and demonstrate how the proposed activities will meet at least one of the following objectives: • The project contributes to the fulfillment of the city's approved and adopted economic development and/or redevelopment plans. • The project prevents or eliminates slums and blight. • The project increases the local tax base. • The project brings a structure into compliance with an existing building code violation. 8. A written request for an extension shall be accompanied by a copy of current financial statements and a$500 upfront processing fee. The processing fee is used to cover processing expenses and will be returned if request is denied. The application for an extension beyond the original term should include a letter of denial from a conventional lender. Refinancing will not be allowed solely for the purpose of reducing the interest rate due to lower market interest rates. 9. The EDA Finance Committee will recommend the approval, denial,or request a resubmission. A recommendation from the Finance Committee will be forwarded to the EDA for final action. X. LOAN POLICY REVIEW The above criteria will be reviewed on an annual basis to ensure that the policies reflected in this document are consistent with the economic development goals set forth by the city. XI. RIGHT OF REFUSAL The Elk River Economic Development Authority may deny any project which it deems inappropriate according to the guidelines established in this document. XII. COMPLIANCE WITH MN BUSINESS SUBSIDY LAW Each company receiving assistance in the principal amount of$75,000 or more from the EDA Microloan Fund shall be subject to the provisions and requirements set forth by Minnesota Business Subsidy Law Statute 116J.993 and the city of Elk River Business Subsidy Policy. Page 9of15 [ Matt t Y INATUREI ELK RIVER ECONOMIC DEVELOPMENT MICROLOAN FUND APPLICATION I. CONTACT INFORMATION Legal Name of Business: Project Site Address: City / State / Zip Contact Person(s) Business Phone Fax Home Phone Email Check One: Proprietor Corporation Partnership Social Security No. Federal ID # State ID # II. NATURE OF LOAN REQUEST Which Micro-Loan Program are you applying for? Industrial Incentive Program Downtown Revitalization Financing Program Energy Efficiency Improvement Program Amount Requested: $ Total Project Cost: $ Type of project: New construction for a start-up business. New construction for an existing business. On site expansion Equipment purchase Remodeling: (circle one)Commercial/ Retail / Industrial Refinancing existing debt Other Page 10of15 P 1 I E 1 E 1 B 1 INA1URE Please give a brief summary of your business and its products or service: Please give a brief summary of the project: Please describe how this loan will impact your project: III. FINANCING Project Costs Land $ Site improvements $ Buildings (attach plans &costs) $ Equipment/Machinery/Fixtures (attach list and estimated costs) $ Remodeling $ Industrial Inventory/Working Capital $ Other (attach description) $ Total Costs $ Comments: Page 11of15 IPINEIEll B1 NAME Proposed Sources of Financing SOURCE NAME TERMS AMOUNT Bank Loan $ Bank Loan $ Other Private Funds $ Applicant Contribution $ Other $ Fed Grant/Loan $ State Grant/Loan $ EDA Microloan $ Tax Increment Financing $ Tax Abatement $ Total Financing $ Collateral Assignments Lien Description of Collateral Position To Bank 1 To Bank 2 To Private Sources To Other Sources To Federal Govt To State To EDA Microloan Page 12of15 r1IIEBEI 1 T INATURE Value of Collateral Book Value Cost Existing Liens Land $ $ $ Buildings $ $ $ Machinery&Equip. $ $ $ Other $ $ $ Other $ $ $ IV. JOB & WAGE GOALS Present# of Employees Total Payroll Jobs To Be Created* Please provide the following information on jobs you expect to create Within 2-years. Average Are the Jobs Expected Number Hourly Annual Permanent or Hiring Job Title of Jobs Wage Salary Temporary? Date *If loan is for job retention only,please explain in Business Plan. Program Objectives (Check all that apply) The project contributes to the fulfillment of the city's approved and adopted economic development and/or redevelopment plans. The project prevents or eliminates slums and blight. The project increases the local tax base. The project brings a structure into compliance with an existing building code violation. Page 13of15 r 1 ■ 1 1 E 1 I T INATUREI V. PROJECT CONTACTS Attorney Name Address Phone Accountant Name Address Phone Financing Sources (lenders,partners, etc...) Name Address Phone Name Address Phone Parent Company Name Address Phone Others Name Address Phone Name Address Phone Page 14of15 r111111111 I f NAME VI. ATTACHMENTS CHECK LIST Please attach the following: A) Written Business Plan: 1. Description of Business 2. Ownership 3. Management 4. Date Established 5. Products/Services 6. Future Plans B) Financial Statements for Past Two Years C) Financial Projections for Two Years D) Resume of Owner/Management E) Personal Financial Statements of Proprietor,Partners, Guarantors F) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project Duration G) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project H) Fee of 1% of amount of loan request VI. AGREEMENT I /We certify that all information provided in this application is true and correct to the best of my/our knowledge. I / We authorize the city of Elk River and the Finance Committee to check credit references and verify financial and other information. I / We agree to provide any additional information as may be requested by the city and the Finance Committee. APPLICANT SIGNATURE BY DATE Page 15of15 ► 1 ■ EiE , of INAIUREI