5. EDSR 07-15-2013 4l E REQUEST FOR ACTION
River
TO ITEM NUMBER
Economic Development Authority 5. ,
AGENDA SECTION MEETING DATE PREPARED BY
July 15, 2013 Clay Wilfahrt,Assistant Director of
Economic Development
ITEM DESCRIPTION REVIEWED By
Consider Industrial Incentive Microloan Application for Jeremy Barnhart, Deputy Director,
Preferred Powder Coating LLC Community Operations and
Development
REVIEWED BY
ACTION REQUESTED
Consider and approve Industrial Incentive Microloan Application for Preferred Powder Coating LLC
BACKGROUND/DISCUSSION
The attached staff report to the EDA Finance Committee dated June 20, 2013, and committee meeting
minutes provide background regarding the Micro Loan request.
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.
The applicant plans to attend the EDA meeting and respond to any questions about the project.
The EDA Finance Committee voted 3-0 to recommend the EDA approve the Industrial Incentive
Microloan for Preferred Powder Coating LLC. Because of absences and a potential conflict of interest,
the vote was not approved by a quorum, but those in attendance did recommend passing it with the
following terms and conditions:
Participation Loan: First National Bank of Elk River
Loan Amount: $100,000
Interest Rate: 3% fixed
Term: 10-year amortization, 5-year balloon
Security: Subordinate position mortgage on building and property, subordinate position
on equipment, and a personal guaranty.
FINANCIAL IMPACT
The Micro Loan Fund has a current cash balance of$906,426.25 with $252,806 in notes receivable.
The EDA is asked to approve the Industrial Incentive Micro Loan request for Preferred Powder Coating
with the following terms and conditions:
rowERig t f
NATURE
$ Participation Loan: First National Bank of Elk River
Loan Amount: $100,000
Interest Rate: 3% fixed
Term: 10-year amortization, 5-year balloon
Security: Subordinate position mortgage on building and property, subordinate position
on equipment, and a personal guaranty.
ATTACHMENTS
• Loan Agreement
• EDA DRAFT Finance Committee Meeting Minutes dated June 20, 2013
• EDA Micro Loan Fund Policy and Guidelines and Application
• Staff report to EDA Finance Committee re: Preferred Powder Coating Micro Loan
Application dated June 20, 2013
Action Motion by Second by Vote
Follow Up
N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2013\7-15-2013\5 sr Request for Action-
Industrial Incentive Microloan Application PPC.docx
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is made effective as of August ,
2013, by and between PREFERRED REAL ESTATE HOLDINGS, LLC, a Minnesota
limited liability company ("Borrower"), and the ECONOMIC DEVELOPMENT
AUTHORITY OF THE CITY OF ELK RIVER, a public body corporate and politic of
the State of Minnesota("Lender").
RECITALS
A. Borrower has applied to Lender for a construction and term mortgage loan
on the Loan Property (as hereinafter defined) in the principal amount of$100,000.00.
B. Lender is willing to make such mortgage loan to Borrower in the principal
amount of $100,000.00 (the "Loan"), subject to all of the terms and conditions of this
Agreement.
C. Contemporaneously with the execution hereof, Borrower is executing and
delivering to Lender the following security documents:
(i) A Promissory Note ("Note") effective as of the date herewith made
by Borrower and payable to the order of Lender, in the original principal amount
of$100,000.00.
(ii) A Mortgage and Assignment of Rents and Security Agreement and
Fixture Financing Statement securing the Note ("Mortgage"). The Mortgage is of
even date herewith, is executed by Borrower, as mortgagor, in favor of Lender, as
mortgagee, and covers property therein described situated in Sherburne County,
Minnesota (the "Loan Property") as well as a security interest in certain
equipment to be purchased using the proceeds of the Loan (the"Equipment").
(iii) The personal guaranties of Dan Bosshart, of
Borrower and Lloyd Peterson, of Borrower (collectively, the
"Guaranties"); and
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, it is hereby agreed as follows:
1. Amount and Purpose of Loan. Borrower agrees to take and Lender agrees
to make a mortgage loan in the principal amount of One Hundred Thousand and No/100s
Dollars ($100,000.00) (the "Loan") to be advanced in a single disbursement as hereinafter
provided, the Loan to be evidenced by the Note and secured by the Mortgage, the
Guaranty and any other security document required under this Agreement. The Loan
proceeds will be used only to pay for the costs of the purchase of the Equipment.
2. Construction of Improvements. For the purposes of this Agreement, the
term "Loan Property" means the real estate described in the Mortgage together with all
improvements now located or hereafter placed thereon.
Borrower agrees to improve as a part of the Loan Property a project ("Project")
consisting generally of constructing a new industrial building, substantially in accordance
with plans and specifications which have been provided to Lender. The improvements to
and equipping of the Loan Property contemplated by the plans and specifications, as the
same may be changed with the approval of Lender, are herein referred to as the
"Improvements." Borrower covenants that when completed, the Improvements shall
comply with all applicable restrictions, conditions, codes, ordinances, regulations and
laws of the City of Elk River ("City") and all other governmental bodies having
jurisdiction over the Loan Property, including, without limitation, the Americans with
Disabilities Act and those related to environmental protection. Borrower has commenced
construction of the Improvements.
Borrower SHALL NOT commence construction of the Improvements until after
this Agreement is signed. Borrower agrees to commence construction of the
Improvements promptly after the date of this Agreement and to carry on continuously,
diligently and with reasonable dispatch the construction of the Improvements to full and
final completion. Failure to complete the Improvements on or before the 1s` anniversary
of the date of this Agreement shall be a default hereunder.
3. Purchase of Equipment. Borrower has provided Lender a preliminary list
of the Equipment that it intends to purchase for use in its business from the Project,
attached hereto as Exhibit A. Borrower will complete the purchase of the Equipment and
take delivery of the same on or before the date that the Certificate of Occupancy for the
Loan Property is issued. If Borrower wishes to purchase other or different Equipment,
Borrower shall provide Lender an updated Exhibit A for its review and approval, which
approval will not be unreasonably withheld, so long as the replacement equipment is
substantially similar to the replaced Equipment in function and value. Borrower will
provide Lender a final list of Equipment purchased within fifteen (15) days after the
Certificate of Occupancy for the Loan Property is issued.
4. Title Insurance. Sherburne County Abstract and Title Company ("Title"),
is designated as the title insurer with respect to this Agreement. Title will insure Lender
against loss or damage on account of mechanic's liens upon or unmarketability of the title
to the Loan Property, and will insure that the Mortgage constitutes a first position lien
upon Borrower's interest in the Loan Property as contemplated by this Agreement,
subject only to the lien of the mortgage set forth as Item 1 on Exhibit B to the Mortgage
(the "Prior Mortgage"). Borrower agrees to promptly and fully observe and comply with
the reasonable requirements of Title and Lender with respect to the title, the Mortgage,
disbursements of funds and such other reasonable requirements as Title may make.
5. Documents to be Delivered. Borrower covenants and agrees to
immediately cause the compliance with the following conditions:
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(a) Note. Deliver to Lender the Note.
(b) Mortgage. Deliver to Lender the Mortgage, together with evidence
that the Mortgage has been or will be duly filed for record.
(c) Guaranty. Deliver to Lender the Guaranty.
(d) Title Insurance Policy. Deliver to Lender a Mortgagee's title
insurance policy ("Title Policy"), from Title issued to Lender in the amount of
$100,000.00 with respect to the Mortgage and insuring that the Mortgage is a first
lien on the Loan Property free and clear of mechanic's liens, materialmen's liens,
taxes, special assessments, rights of parties in possession, other than: (i) the Prior
Mortgage; and (ii) the rights of tenants as tenants only under existing leases, and
questions of title and survey approved in writing by Lender.
(e) Organizational Documents and Resolutions. Deliver to Lender
copies of the (i) articles of organization for Borrower certified by the Minnesota
Secretary of State, (ii) a certificate of good standing for Borrower issued by the
Minnesota Secretary of State; (iii) a copy of Borrower's member control
agreement and bylaws; and (iv) a certified copy of resolutions of Borrower
authorizing the execution and delivery of this Agreement, the Note, the Mortgage,
and any other document to be executed by Borrower pursuant to this Agreement.
(0 Insurance. Deliver to Lender: (i) a certificate or policy for all
insurance required, under the terms hereof or of the Mortgage, to be maintained
by Borrower; and (ii) evidence that no part of the Loan Property is located in an
area designated as being a flood plain or flood hazard area as defined by the Flood
Hazard Boundary Map published by the Federal Insurance Administration.
(g) Compliance With Laws, Etc. Deliver to Lender such evidence as
Lender may require as to the compliance of the Loan Property and the
Improvements with (i) all applicable laws, codes, rules, regulations and
ordinances, including, without limitation, those relative to environmental
protection, protection of wetlands, building and zoning matters and the Americans
with Disabilities Act, and (ii) the requirements of any restrictive covenants,
conditions and restrictions; conditional use permit and/or planned unit
development applicable to the Loan Property.
(h) Hazardous Substances. Deliver to Lender evidence acceptable to
Lender, that: (i) the Loan Property has not been used as a hazardous waste storage
facility or burial site; (ii) the soil is free from hazardous waste, hazardous
substances, pollutants and contaminants; and (iii) no hazardous waste, hazardous
substance, pollutant or contaminant has been used in the construction or use of
any building or other improvement on the Loan Property. For purposes of this
subparagraph, the terms "hazardous waste," "hazardous substances," "pollutants"
and "contaminants" shall include, but not be limited to, polychlorinated biphenyls
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(PCBs), asbestos, petroleum products and any other chemical or substance
determined to be a hazard to human health or the environment.
(i) Indemnity Deliver to Title any indemnity agreement in favor of
Title in the form required by Title in order for Title to issue the title insurance
policies referred to above.
(j) Project Cost and Source of Funds Certificate. Deliver to Lender a
sworn certificate detailing Project costs and sources of funds to be utilized for the
Project ("Project Cost Certificate"), in a form acceptable to Lender, verified on
oath by a manager of Borrower showing an itemized breakdown of: (i) the
source and amount of all Project funds; and (ii) of the total cost of the Equipment
and the other Improvements, including, without limitation, the cost of
constructing the Improvements, any special assessments, soft costs and all other
costs and charges to be paid from the Loan proceeds and/or other Project funds or
necessary to complete the Improvements. Borrower shall deliver to Lender lien
waivers, receipts for payment and other evidence of payment acceptable to Lender
with respect to any such portion of costs and charges incurred to the date of the
Project Cost Certificate.
(k) Sworn Construction Statement. Intentionally Omitted.
(1) Expend Funds; Lien Waivers; Property Documents. Not later than
fifteen (15) days after the issuance of the Certificate of Occupancy for the Loan
Property, Borrower shall deliver to Lender: (i) a copy of the Certificate of
Occupancy for the Loan Property; (ii) a final Equipment List executed by an
officer of Borrower(which, upon acceptance by Lender, will be attached hereto as
Exhibit A-1); (iii) a final Project Cost Certificate; and (iv) evidence acceptable to
Lender that Borrower has paid all acquisition, delivery and installation costs for
the Equipment.
(m) Consent. Deliver to Lender a copy of the consent to the Mortgage
from the Prior Mortgage mortgagee, in the form attached to the Mortgage as
Exhibit C.
(n) Prior Mortgage Documents. Deliver to Lender copies of all of the
documents relating to the Prior Mortgage(the "Prior Mortgage Documents").
(o) Zoning Matters. Deliver to Lender evidence that Borrower has
obtained municipal and zoning approval necessary to complete the Improvements,
including, without limitation, compliance with any signage ordinances.
(p) Escrow and Disbursement Agreement. Deliver the Escrow and
Disbursement Agreement executed by Borrower and Title, to Lender.
(q) Program Fee. Deliver to Lender the program fee of$ .00.
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Lender may waive any of the above requirements in its sole discretion.
6. Disbursement of Loan. Within two (2) business days after receipt by
Lender of all of the items required pursuant to Section 5 above in the form and condition
required therein and confirmation from Title that Title is prepared to issue the
mortgagee's title insurance policy as required herein, Lender agrees to disburse the Loan
proceeds into the escrow account set up pursuant to the Escrow and Disbursement
Agreement by and among Lender, Borrower and Title. The Escrow and Disbursement
Agreement shall be in form and content reasonably acceptable to the parties and shall
provide, among other things, that: (i) the Loan proceeds shall be disbursed according to
industry standard procedures; (ii) Title may pay requested funds directly to parties
named in any Sworn Construction Statement or draw request presented to Title for
payment (as opposed to payment to Borrower); and (iii) if Borrower does not comply
with Sections 15 (a) or (h) of this Agreement, Title may return the Loan proceeds to
Lender in reliance upon a written request by Lender.
7. Access to Loan Property. Lender and its respective representatives shall
have at all reasonable times the right to enter and have free access to the Loan Property
and the right to inspect all work done, labor performed and material furnished in
connection therewith.
8. Books and Records. Borrower agrees to maintain accurate and complete
books, accounts and records in regard to the Loan Property in a manner reasonably
acceptable to Lender. Lender and its representatives shall have the right to inspect,
examine and copy all such books and records of Borrower and Borrower shall, at
Lender's request, furnish such information as Lender may reasonably demand.
9. Encumbrances and Transfer. Borrower agrees not to sell, transfer, lease or
convey the Loan Property, the Equipment or any part of either, or any interest therein, or
encumber the Loan Property, the Equipment or any part of either, in any manner, without
written consent of Lender which consent may be granted or withheld in the sole
discretion of Lender. This requirement shall apply to each and every sale, transfer, lease
or conveyance, whether voluntary or involuntary and whether or not Lender has
consented to any such prior sale, transfer lease or conveyance.
10. Time of Essence. Time is of the essence in the performance of this
Agreement.
11. Assignability. Borrower shall not assign this Agreement or all or any part
of any Advances to be made hereunder without written consent of Lender, which consent
may be withheld, conditioned or delayed in Lender's sole discretion. Lender may freely
assign or otherwise transfer (including by participation) all or any part of its interest in
the Loan or any or all of the Loan documents, in Lender's sole discretion.
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12. Miscellaneous Covenants of Borrower. Borrower covenants and agrees
with Lender that, without costs to Lender, Borrower will:
(a) Performance of Conditions. Promptly keep, perform and comply with all
of the terms, covenants and conditions to be kept and performed by
Borrower, as required by the City and any other governmental body
having jurisdiction over the Loan Property as a condition of platting,
rezoning or developing the Loan Property; keep unimpaired the rights of
Borrower under any permit or agreement issued or made by the City or
other governmental body having jurisdiction over the Loan Property and
any contracts obtained or held by Borrower in connection with the
construction or operation of the Improvements; and to enforce the prompt
performance of all of the terms, covenants and conditions to be kept and
performed by the City or other governmental body having jurisdiction
over the Loan Property, respectively, under any permits or agreements
issued or made by the City or such other governmental bodies, and any
contractors under all contracts obtained or held by Borrower in connection
with construction or operation of the Improvements or Borrower's
business.
(b) Amendment, Etc. of Documents. Not amend, cancel, terminate,
supplement or waive any of the material terms, covenants and conditions
of any permit or agreement issued or made by the City or any other
governmental body having jurisdiction over the Loan Property, or any
other contracts obtained or held by Borrower in connection with the
construction or operation of the Improvements or any contracts,
documents or agreements referred to herein without the prior written
approval of Lender. Borrower will provide to Lender complete
documentation concerning any change made to the Project.
(c) Performance of Note, Mortgage, Etc. Without limiting the foregoing,
keep and perform all of the terms, covenants, conditions and requirements
of the Note, the Mortgage, this Agreement and the Prior Mortgage
Documents.
(d) Insurance. During the term of the Mortgage, Borrower shall procure and
maintain or cause to be procured and maintained at its sole expense
builder's risk insurance, casualty insurance, public liability insurance and
such other types of insurance as are reasonably required by Lender from
time to time, including, without limitation, the coverages expressly
required by the Mortgage, insuring Lender and Borrower with coverages,
in amounts and with companies satisfactory to Lender. The policy or
policies or duly executed certificate or certificates for such insurance and
renewals or replacements thereof shall be deposited with Lender.
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(e) Pay Charges. Immediately pay all loan charges including, but not limited
to: (i) Lender's attorneys' fees; (ii) title insurance fees, costs and
premiums; (iii) mortgage registration taxes and filing fees of the Mortgage
and any other instruments required under this Agreement.
(f) Pay Certain Costs. Immediately after written demand from Lender and
without regard to whether or not any of the Loan proceeds have been
advanced under this Agreement, pay or cause to be paid from time to time
if requested by Lender, costs referred to in the Project Cost Certificate in
an amount equal to the costs referred to therein in excess of the Loan
proceeds remaining available to be advanced to pay such costs, and
furnish to Lender proof of payment thereof satisfactory to Lender and
Title.
(g) Copies of Plans, Contracts, etc. Furnish Lender from time to time as
reasonably requested by Lender, copies of the plans and specifications,
contracts and any other specifications and contracts relating to the
Improvements together with estimated costs of such Improvements.
(h) Default Notices. Provide Lender with a copy of any default notice
received pursuant to the Prior Mortgage Documents or any governmental
authority, promptly after receipt of the same.
(i) Continual Operation. At all times while any portion of the Loan remains
outstanding, Borrower will: (i) maintain its status as a for profit entity;
(ii) maintain a positive net worth; and (iii) will operate its business from
the Loan Property in a first class manner (from and after issuance of the
Certificate of Occupancy for the Loan Property).
(j) Title to Equipment. Borrower owns or will own all of the Equipment "free
and clear," that Lender will have a "first position" lien in the Equipment
pursuant to the Mortgage and that no other party has any right, title or
interest in the Equipment, other than any subordinate security interest in the
Equipment that might be granted pursuant to the Prior Mortgage.
13. Warranties. Borrower represents and warrants to Lender the following:
(a) The Borrower is limited liability company duly formed, validly existing
and in good standing under the laws of the State of Minnesota.
(b) The making and performance of this Agreement and the execution and
delivery of the Note, the Mortgage and any other instrument required
hereunder are within the powers of the Borrower and have been duly
authorized by all necessary company action on the part of the Borrower.
This Agreement and the Note, the Mortgage and any other instruments
required hereunder have been duly executed and delivered and are the
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legal, valid and binding obligations of the Borrower enforceable in
accordance with their respective terms.
(c) No litigation, tax claims or governmental proceedings are pending or
threatened against the Borrower or the Loan Property, and no judgment or
order of any court or administrative agency is outstanding against the
Borrower or the Loan Property which would have a material adverse
effect on Borrower or the Loan Property.
(d) Borrower has filed all tax returns (federal and state) required to be filed
for all prior years and paid all taxes shown thereon to be due, including
interest and penalties. Borrower will file all such returns and pay all such
taxes for the current and future years.
(e) All information, financial or other, which has been submitted by Borrower
and Guarantors in connection with the Loan is true, accurate and complete
in all material respects.
14. Indemnification. Borrower agrees to indemnify Lender and save it
harmless against all loss, liability, expense, or damages including but not limited to
attorneys' fees, which may arise by reason of the assertion of any lien against the Loan
Property or the Equipment. Borrower will indemnify and hold Lender harmless from any
damages Lender may suffer or incur from Borrower's breach of its covenant in Section
12(j).
15. Defaults. Each of the following shall constitute an Event of Default:
(a) Borrower: (i) fails to commence construction of the Improvements
within thirty (30) days after the date of this Agreement; (ii) work on construction
of the Improvements is halted for more than five (5) consecutive business days;
(iii) construction of the Improvements is not completed by November 31, 2013;
(iv) the Improvements are not constructed in accordance with this Agreement; or
(v) Borrower abandons the Loan Property.
(b) Bankruptcy, reorganization, assignment, insolvency or liquidation
proceedings, or other proceedings for relief under any applicable bankruptcy law
or other law for relief of debtors are instituted by or against Borrower and, if such
proceedings are instituted against Borrower, an order, judgment or decree,
without the consent of Borrower appointing a trustee or receiver for Borrower or
any part of its property or approving a petition under the bankruptcy laws of the
United States or any similar laws of any state or other competent jurisdiction,
shall have remained in force undischarged or unstayed for a period of thirty (30)
days.
(c) Any judgment, attachment, garnishment or other similar process is
entered against Borrower or against any property or assets of Borrower and is not
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released, satisfied or discharged or bonded to Lender's satisfaction within thirty
(30) days of entry.
(d) Any of the terms, covenants or conditions of any permit or other
agreement issued or made by the City or other governmental body having
jurisdiction over the Loan Property, including, but not limited to, those relating to
the cost of or time for installation of the Improvements, are not complied with
within the time required thereby or are terminated or modified by the City or such
other governmental body and Borrower has not taken the necessary steps to
correct or cure the same within thirty (30) days after written notice is given by
Lender.
(e) Any mechanic's or material supplier's lien is filed, against the Loan
Property and is not released, satisfied or discharged or bonded to Lender's
satisfaction, subject, however, to Borrower's right to contest the same in
accordance with the provisions of the Mortgage.
(f) A transfer which violates by Paragraph 9 hereof, Encumbrances
and Transfer,occurs.
(g) Borrower: (i) fails to pay any amount due under this Agreement,
the Note, the Mortgage, or the Prior Mortgage Documents when due; (ii) fails to
perform any other obligation to be performed under this Agreement, the Note, the
Mortgage, the Prior Mortgage Documents or any other document executed by
Borrower pursuant to this Agreement; or (iii) fails to pay any amount or perform
any obligation under any other note, mortgage or other agreement now or
hereafter made by Borrower in favor of or with Lender or otherwise now or
hereafter held by Lender or the Prior Mortgage mortgagee, and such failure
continues beyond any applicable cure period.
(h) Borrower fails to timely: (i) purchase the Equipment; (ii) timely
take delivery of the Equipment as set forth in Section 3 above; or (iii) provide
Lender any information necessary for Lender to perfect its security interest.
(i) Any representation or warranty by Borrower contained herein or in
the Note, the Mortgage, the Prior Mortgage Documents or any other instrument
required hereunder is false or untrue in any material respect when made.
Upon the occurrence of an Event of Default, Lender, at its option, shall, in addition to any
other remedies which it might be entitled to by law, have the right to:
(1) To refrain from making advances under this Agreement and/or to require
Title to return advances of Loan proceeds held by Title;
(2) To enter into possession of the Loan Property and perform any and all
work and labor necessary to complete the Improvements substantially as
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required under this Agreement and to do all things necessary or incidental
thereto;
(3) To perform such other acts or deeds which reasonably may be necessary to
cure any default existing under this Agreement, and to this end, it is
hereby agreed as follows:
(i) All sums expended by Lender in effectuating its rights under
Subparagraphs (2) and (3) of this Paragraph shall be deemed to
have been advanced under this Agreement and to be secured by the
Mortgage and any other security document required under this
Agreement as security for the Loan.
(ii) Borrower hereby constitutes and appoints Lender its true and
lawful attorney-in-fact with full power of substitution either in the
name of Lender or in the name of Borrower or in the name of both,
for the following purposes: (a) to purchase the Equipment or to
complete the Improvements or cause the same to be completed; to
use the plans and specifications; to make such additions, changes
and corrections in the plans and specifications as Lender
reasonably shall deem necessary or desirable; to collect and use
any funds of Borrower; to use any funds which may remain
unadvanced under this Agreement; to employ such contractors,
subcontractors, agents, design professionals and inspectors and
enter into such contracts and arrangements as Lender reasonably
deems necessary for such purposes; to pay, settle or compromise
all existing bills and claims which may be liens against the Loan
Property or as may be necessary or reasonably desirable for the
completion of the Improvements or clearance of title; to execute all
applications and certificates in the name of Borrower; to prosecute
and defend all actions or proceedings in connection with the
construction of the Improvements on, or any other matter relating
to, the Loan Property or the Equipment and do any and every act
which Borrower might do in its own behalf; (b) to enforce by any
means that Lender then reasonably deems necessary or advisable,
all of the terms, covenants and conditions of any permit or
agreement issued by the City or any other governmental body
having jurisdiction over the Loan Property or the construction
contracts or any other contracts obtained or held by Borrower in
connection with the construction of and any other contracts; (c) to
perform each of the terms, covenants and conditions to be kept and
performed by Borrower under any permit or authorization issued
by the City or any other governmental body having jurisdiction
over the Loan Property or the construction contracts or any other
contracts and/or leases obtained or held by Borrower in connection
with the construction or operation of the Improvements, and any
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other contracts; (d) without limiting the foregoing, to perform each
of the terms, covenants and conditions to be kept or performed by
Borrower under this Agreement, the Mortgage and any other
instrument required under this Agreement or the Prior Mortgage
Documents; and (e) to do all things that Lender reasonably deems
necessary or advisable for the purpose of carrying out the powers
enumerated in (a), (b), (c) and (d) of this Subparagraph(ii);
(iii) The powers herein granted Lender shall be deemed to be powers
coupled with an interest and the same are irrevocable;
(4) cancel this Agreement;
(5) bring appropriate action to enforce such performance and the
correction of such Event of Default;
(6) declare the entire unpaid principal of the Note and all accrued
interest thereon immediately due and payable without notice;
(7) foreclose the Mortgage and any other security instrument referred
to in this Agreement and/or exercise any other rights or remedies it may have
under the Mortgage and such other security instrument.
(8) in addition to the other remedies hereunder, if Borrower is in
default under Section 15(a)(iii) or 15(h)(ii) above, Lender may terminate this
Agreement upon ten (10) business days' prior written notice to Borrower. If
Borrower has not cured this default within such 10-business day period, on such
10th business day: (i) Escrow Agent shall refund all Loan proceeds to Lender; (ii)
all of the Loan documents shall terminate and be of no further force and effect,
except for (a) any provision of a Loan document which indemnifies Lender, and
(b) the Note and Guaranty shall remain in force until all interest that has accrued
until such 10th business day is repaid to Lender.
16. Default under Note and Mortgage. The failure by Borrower to keep or
perform any of the terms, covenants and conditions to be kept or performed by it under
this Agreement shall constitute a default under the Note, the Mortgage and any other
security instrument held by Lender in connection with the Loan.
17. Notices. Any notices given hereunder shall be in writing and shall be
deemed to have been given when delivered personally or three (3) days after deposited in
the United States mail, registered, postage prepaid, addressed as follows:
If to Borrower:
Preferred Real Estate Holdings, LLC
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Rogers, Minnesota 55
Attention:
If to Lender:
Economic Development Authority of the City of Elk River
13065 Orono Parkway
Elk River, Minnesota 55330
Attn: Director of Economic Development
or addressed to any such party at such other address as such party shall hereafter furnish
by notice to the other party. Any notice delivered personally to Borrower shall be
delivered to an officer of Borrower, and any notice delivered personally to Lender shall
be delivered to an officer of Lender at the address for Lender for the mailing of notices.
Either party may change its address for the giving of notices by giving the other party at
least ten (10) days notice in the manner provided above.
18. Headings. The headings used in this Agreement are for convenience only
and do not define, limit or construe the contents of this Agreement.
19. Bindings on Successors and Assigns. Subject to the limitations on transfer
contained in this Agreement, this Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto.
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Minnesota, without giving effect to any choice or conflict of
law provision or rule.
21. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original and all of which shall constitute the same
agreement.
22. Entire Agreement. This Agreement, the Note, the Mortgage and the other
documents executed by Borrower and/or Lender pursuant to this Agreement contain the
entire agreement between the parties with respect to the subject matter hereof and
supersede all prior understandings and agreements, both oral and written. This
Agreement may be amended only in a writing signed by the parties hereto.
23. Fees and Expenses. Borrower agrees to pay to Lender immediately upon
demand all costs and expenses, including, without limitation, all attorneys fees, incurred
by Lender in connection with the enforcement of the Lender's rights and/or the
collection of any amounts which become due to Lender under this Agreement, the Note,
the Mortgage or the other documents executed in connection herewith; and the
prosecution or defense of any action in any way related to this Agreement, the Note, the
Mortgage or the other documents executed in connection herewith.
-12-
[Signature Pages follow]
[Remainder of page intentionally left blank.]
-13-
Signature Page to Loan Agreement
IN TESTIMONY WHEREOF, each of the parties hereto has caused these
presents to be effective as of the day and year first above written.
PREFERRED POWDER COATING LLC
By:
Name:
Its:
-14-
Signature Page to Loan Agreement
IN TESTIMONY WHEREOF, each of the parties hereto has caused these
presents to be effective as of the day and year first above written.
ECONOMIC DEVELOPMENT
AUTHORITY OF THE CITY OF ELK
RIVER
By:
Name:
Its:
By:
Name:
Its:
-15-
EXHIBIT A
Equipment List
-16-
EXHIBIT A-1
Final Equipment List
GP:3453035 v2
-17-
City of
1.11
Elk Memorandum
River
To: EDA
From: Director of Economic Development Brian Beeman
Date: July 12, 2013
Subject: Attachment for Item 5 Regarding Industrial Incentive Microloan
for Preferred Powder Coating
Staff is waiting for a document from the attorney. The following attachment will be
forwarded once received.
1. Loan Agreement
Staff apologizes for the delay and will forward the document once it is finalized. Please
contact me with any questions. Thank you for your patience in this matter.
P-11111. 1 I T
C:\Users\dhuebner\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\Q7RBTRKC\5 at 4 NAME
Loan Agreement Attachment Memo.docx
MEETING OF THE EDA FINANCE COMMITTEE
HELD AT THE ELK RIVER CITY HALL
THURSDAY, JUNE 20, 2013
Members Present: Paul Motin, Cliff Lundberg,Dan Tveite, Chad Vitzham
Members Absent: Larry Toth,Nate Ova11
Staff Present: Assistant Director of Economic Development, Clay Wilfahrt,Tom Sagstetter, ERMU
Others Present: Annie Deckert,Decklan Group
1. Call Meeting to Order ��� ` vA�
Assistant Director of Economic Development Clay Wilfahrt cod the .• to order at
7:30am
2. Consider Industrial Incentive Microloan for Preferred;t'owder Coating,'
Mr. Wilfahrt reviewed the staff report. ,���� �����
Mr. Lundberg asked if the jobs required as part of the on ce l dy projects would overlap with the jobs
required for the microloan. Mr. Wilfahrt explained that Pre .. Powder would be required to create a
certain amount of jobs for each that way covered by the • .er they plan to create. Mr. Lundberg
also asked if our subsidy policy requires 44\4 ,business have a 1h s shearing at Council,but Mr.
Wilfahrt stated that it was tied to statute. �� �\ �'�
k
MOVED BY LUNDBERG AND SEGO 4EISY vr0 RECOMMEND APPROVAL
OF THE APPLICAT R AN INDiTRIAL INCTTIVE MICROLOAN FOR
PREFERRED POD C v` ING MOTICIN FAILE13-0 COMMISSIONER VITZHAM
ABSTAINED. A �\
3. Discuss the Microloan an nimend Changes
p rt �:`\\\\ . � \
Mr. Wilfa . 4�wed the S ,� e ort.� �,
\\ `\
The mmittee discu\ how m`C kof the energy efficiency microloan should have to be used for
eii r efficiency impro ; ,tents. Thh 'oi sensus of the committee was that 50% of the loan should be
used f` nergy efficiency The defix on of energy efficiency is to be the same as what ERMU and
�
other aree. ties use.
The committee •',.cussed ng microloan funds for working capital, and the consensus of the committee
was to not fund i ng�capital. The committee also came to a consensus that non-profits should not
be excluded as long s ey meet the other requirements of the policy.
The committee requested that staff compare the current downtown area with the downtown area as
defined by the Downtown Plan.
Staff will draft revisions to the policy and bring to the next Finance Committee meeting for review.
4. Closing
The EDA Finance Committee meeting ended at 8:17 a.m.
EDA Finance Committee Minutes Page 2
January,30,2013
Page 2 of 2
Respectfully submitted by,
Clay Wilfahrt
Assistant Director of Economic Development
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N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2013\7-15-2013\5 at 3 Finance Committee Minutes 6 20
2013(2).doc
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City of -�
Elk
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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/econotrucdevelopmenthools
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.
11. 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 2 of 15 Pp H W f R E@
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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.
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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 poMtRE6
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 P O W E R E D B I
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• 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 FO , EREp BY
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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 7of15 pq V t g E 6 g
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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
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tNAIUPE
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.
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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 #
11. 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 rWEB10
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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:
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Proposed Sources of Financing
SOURCE NAME PERMS 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 P O N E R E 9 g i
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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.
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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
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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 15 of 15 P4 n W E R E A BY
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El REQUEST FOR ACTION•
River
To ITEM NUMBER
Economic Development Authority Finance Committee
AGENDA SECTION MEETING DATE PREPARED BY
June 20,2013 Clay Wilfahrt,Assistant Director of
Economic Development
ITEM DESCRIPTION REVIEWED By
Industrial Incentive Micro Loan Application,Preferred Powder Brian Beeman,Director of Economic
Coating Development
REVIEWED BY
Jeremy Barnhart,Deputy Director
Community Operations and
I Development
ACTION REQUESTED
Consider Industrial Incentive Micro Loan application for Preferred Powder Coating and make
recommendation to the EDA with conditions as outlined in staff report.
BACKGROUND/DISCUSSION
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.
Preferred Powder Company is an environmentally-sensitive metal powder coating company. They are
currently leasing a 73,000 square foot facility in Rogers,Minnesota and employ 24 people. They are
seeking$100,000 to help with the cost of constructing a 100,000 square foot facility in the city-owned
Nature's Edge Business Center. Based on their application, Preferred Powder plans to add 8-10 new jobs
at$15/hr. as a result of the project. The project will induce $6.8 million in private investment.
Preferred Powder will receive approximately $4.5 million in private financing from Frist National Bank of
Elk River and a commitment letter is attached to their application. They were also approved for a
$200,000 forgivable loan, and they are applying for a total of$1,153,878 in Tax Abatement.
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- Energy Efficiency Improvement Program
• Max. Loan Amount: $100,000
• Interest rate: Fixed at 3%
• Equity: 10% or more of project
• 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.
rOIENER it
NATURE
• The loans will be secured by personal and corporate guarantees, and if applicable a lien on equipment
financed and subordinate mortgage on the property.
• 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.
Preferred Powder Coating
• Amount requested: $100,000
• Rate requested: Fixed at 3%
• Equity proposed: $391,817
• Term: 10-year amortization, 5 year balloon
• The EDA will obtain a subordinate position mortgage on building and property, subordinate
position on equipment, and a personal guarantee.
• The borrower will create a minimum of 8 jobs and retain 24 jobs. They are required to create or
retain five jobs. They plan to pay$15 per hour for each job. The business subsidy agreement will
require a five-year location requirement.
The EDA will consider the Finance Committee's recommendation at their July 15 meeting.
If recommending approval, the following terms and conditions will apply:
Participation Loan: First National Bank of Elk River
Loan Amount: $100,000
Interest Rate: 3% fixed
Term: 10-year amortization, 5-year balloon
Security: Subordinate position mortgage on building and property, subordinate position
on equipment, and a personal guaranty.
ATTACHMENTS
• Microloan Policy and Guidelines
• Micro Loan Application and applicable attachments
N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2013\7-15-2013\5 at 2 Preferred Powder EDA
Finance RFA 6-20-2013(2).docx
ELK RIVER ECONOMIC DEVELOPMENT
MICROLOAN FUND APPLICATION
1. CONTACT INFORMATION
Legal Name of Business: Preferred Powder Coating
Project Site Address: 251 George Weber Drive
City/ State / Zip Rogers, MN 55374
Contact Person(s) Annie Deckert, Decklan Group
Business Phone 612-564-0795 (Annie)
Email annie@decklangroup.com
Social Security No.
Federal ID# 80-0429246 State ID# 73189614
II. NATURE OF LOAN REQUEST
Which Micro-Loan Program are you applying for?
•
X Industrial Incentive Program
Downtown Revitalization Financing Program
Energy Efficiency Improvement Program
Amount Requested: $ 100,000 Total Project Cost: $ 6,192,695
Type of project:
New construction for a start-up business.
X New construction for an existing business.
X On site expansion.
X Equipment purchase
Remodeling: (circle one)Commercial / Retail / Industrial
Refinancing existing debt
Other
Please give a brief summary of your business and its products or service:
Page 10of7 IPOVE1110 BT
NATURE
Preferred Powder Coating is a metal powder coating company that prides
itself in environmental preservation and conservation, ensuring their work is
done in an environmentally sensitive manner through a process known as
EEP, or"Enhanced Performance Pretreatment" which was developed to meet
the new phosphate restrictions, reduce water usage, lower chemical
consumption and eliminate the natural gas needed to heat the stage.
Preferred Powder Coating works with all types of ferrous and non-ferrous
substrates including steel, aluminum, stainless, cast iron and zinc die
castings. Preferred Powder works with a variety of industries that require
premium powder services including, but not limited to: aeronautics, athletic
equipment, automotive, die casting, medical equipment, OEM, recreational,
retail and sheet metal.
Please give a brief summary of the project:
Currently located in Rogers, MN in a 73,000 state of the art facility,
Preferred Powder is looking to expand their operations and relocate to the
City of Elk River. Elk River Economic Development Authority President Dan
Tveite and Elk River economic development staff toured the facility with
President Lloyd Peterson and Vice President of Operations Dan Bosshart to
learn more about the company in late 2012.
Preferred Powder currently employs 24 employees, and plans on creating 8-
10 jobs within the next two years. They plan on constructing a 100,000
square foot facility which will not only increase Elk River's tax base; it will
also generate excitement and momentum for the newly finished Nature's
Edge Business Center, being as they will be the first to build in the park.
Because of their operations, a rectangular shaped building is required to
meet the needs of their equipment lay-out and maximize efficiency. This
10.36 acre site poses challenges not only with the wetlands, but the Northern
Natural Gas line (approximately one acre) which runs North/South through
the middle of the property. The existing encroachment agreement between
the city of Elk River and Northern Natural Gas prohibits anything from
being built over this gas main. Because of where the gas line is located, it
leaves approximately six buildable acres to the west of the line, making it
challenging to build an adequate building without impacting the existing
wetlands. Preferred Powder has received approval from the TEP Committee
for wetland mitigation. They have taken all steps required to build a 100,000
square foot facility on an extremely challenging lot. The four acres to the
east of the gas main will not be built on, but is necessary to be utilized during
site preparation.
Please describe how this loan will impact your project:
This loan will help offset the total costs of wetland delineation and site
preparation necessary to appease the TEP requirements and to accommodate
Page 1 1 oE', NATURE
for the non-buildable area of the gas line that runs through their property.
Total cost for this is $630,000.
III. FINANCING
Project Costs
Land $ 680,895
Site improvements(site prep, grading,wetland mitigation/delineation,gas line)
$ 630,000
Buildings (attach plans&costs) $ 3,470,000
Equipment/Machinery/Fixtures
(attach list and estimated costs) $ 1,000,000
Wetland Credits $ 11,800
Industrial Inventory/Working Capital $ 200,000
Other(attach description) Contingencies $ 200,000
Total Costs $ 6,192,695
Comments:
Proposed Sources of Financing
SOURCE NAME TERMS AMOUNT
Bank First National Bank $ 4,547,000
Other Private Funds $
Applicant Contribution $ 191,817
Other Elk River Forgivable Loan $ 200,000
Fed Grant/Loan $
State Grant/Loan $
EDA Microloan $ 100,000
Tax Abatement $ 1,153,878
P'Ge12of7 Y 9 N f N E 6 e 1
NATURE
Total Financing $ 6,192,695
Collateral Assignments—see letter of commitment
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
Value of Collateral
Book Value Cost Existing Liens
Land $ $ 680.895 $
Buildings $ $ 3.470.000 $
Machinery&Equip. $ $ 1,000.000 $
Other
Other $ $ $
IV. JOB & WAGE GOALS
Present# of Employees 24
Jobs To Be Created*
Please •rovide the followin•*information on 'obs fou ex sect to create Within 2-'cars.
Average Are the Jobs Expected
Number Hourly Annual Permanent or Hiring
Job Title of Jobs Wage Salary Temporary? Date
Various 8-10 $15.00 Permanent 11-2015
Page 13of? E P O I F I R E I
NATURE
*If loan is for job retention only,please explain in Business Plan.
Program Objectives
(Check all that apply)
•
X The project contributes to the fulfillment of the city's approved and adopted
economic development and/or redevelopment plans. (Business
development as outlined in the 2013-2016 Economic Development Strategic
Plan)
The project prevents or eliminates slums and blight.
_X._ The project increases the local tax base.
The project brings a structure into compliance with an existing building code
violation.
V. PROJECT CONTACTS
Attorney Name Lloyd Peterson
Address 13251 George Weber Drive, Rogers, MN 55374
Phone 63-428-4990
Email 1peterson @preferr•edpowder.com.
Engineer Name Craig Jochum, President
Address 3601 Thurston Avenue, Anoka, MN 55303
Phone 763-852-0485
Lender Name Chad Vitzhum, First National Financial Services, Inc.
Address 812 Main Street NW, Elk River, MN 55330
Phone 763-441-2200
Email cvitzthum @fnber.com
•
Page 14of7 IPOIVEREI YT
NATURE
VI. ATTACHMENTS CHECK LIST
Please attach the following:
_X_A) Written Business Plan:
1. Description of Business
2. Ownership
3. Management
4. Date Established
5. Products/Services
6. Future Plans
_X_B) Financial Statements for Past Two Years (available upon request-
okay with city; confirmed 2-19-13 re: Forgivable Loan application)
X_C) Financial Projections for Two Years (available upon request-
okay with city; confirmed 2-19-13 re: Forgivable Loan application)
_X__D) Resume of Owner/Management (available upon request- okay
with city; confirmed 2-19-13 re: Forgivable Loan application)
_X_E) Personal Financial Statements of Proprietor,Partners, (available
upon request- okay with city; confirmed 2-19-13 re: Forgivable Loan
application)
Guarantors
__X F) Letter of Commitment from Applicant Pledging to Complete
During the Proposed Project Duration
_X_G) Letter of Commitment from the Other Sources of Financing,
Stating Terms and Conditions of their Participation in
Project
_X H) Fee of 1% of amount of loan request(Check to City of Elk River in the
amount of$1,000)
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.
r// !
APPLICANT SIGNATURE /
BY
DATE
Page 15of7 IPOILHES BY
NATURE
Preferred Powder Coating I About.Preferred Powder Coating I Rogers, Minnesota Page 1 of 2
0 EFERRED
t' GW DEC OAT ING'
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HOME I ABOUT US 1 POWDER COATING 4avoo8 RIV S SL;T�° a hp€A&GRAr%tt CS f floes.EN`t crwra.T.,,.,
• .About I
• Mission About Preferred Powder Coating
• Quality.& Performance
• {)ur t'ticili_r.v All employees of Preferred Powder Coating share the common goal of
• Empk t meat providing top-notch customer service that is second to none.This commitment
• Limo is something we take very seriruisly.
Just one of the things that sets Preferred apart is the personal attention each
client receives from our staff:no matter the size of the job.Preferred does not
compromise quality for any reason.We take the time necessary to perform
work to meet-and exceed-our customers'expectations.
Due to the size and capabilities ofour facility.Preferred is exceptionally cost-
competitive in large-run,jobs.The technology we have on site provides our
customers and staff with the latest status of each job on the floor.needs for
materials.schedules,and costs associated with each aspect of our work.
What makes Preferred Powder t_outing distinctly different:
• A focus on individual training with team-driven execution
• Ensuring cost-effectiveness and high-quality standards
• Being-green"with no phosphate.low-waste and CNC'coniml
• Quality calibration of automated chemical dispensing to ensure
consistent and repeatable process controls
• A return to the core competency of large-volume powder coating
• Our development of partnerships that competitively compete against
global manufacturing competition
In the summer 012009,Preferred Powder Coming acquired the assets and
43.000-square-foot facility of Profile Companies in Rogers.Minn.Preferred
takes pride in continuing to provide clients w+ith outstanding quality and service
in powder coating--and plans to take customer service to a brand-new level.
Prefetred's Vice President ot'Operations.Dan Bo_sshart,worked as operations
manager with the firmer company.and partnered with Lloyd Peterson to form
Preferred. Lloyd Peterson has a long history in contract law and business •
relationships including many years with the Employers Assocoation.
General Manager Scott Peterson,and Estimator/Buyer Derek Ramacher.
remain from Profile Companies and bring 40 years of metal finishing
experience to Preferred Powder Coating. Derek and Scott utilize state-of-the-
http:/!preferredpowder.eomlabout us1 5/27/21)13
Preferred Powder Coating J About Preferred Powder Coating 1 Rogers,Minnesota Page 2 of 2
art ERP(Enterprise Resource Planning)software to ensure all or the
organizational functions arc integrated into one system that produces real-time
access to the systems data.
Currently we occupy 73,000 square feet of warehouse space and have added
the Preferred Sign and Graphics division as well as the Preferred License Plate
Frame division.
QUICK FIND INDUSTRIES SERVED PREFERRED POWDER COATING
(JAILER Y
•
• Die/Foundry Castings referred Powder Coating
132:51 Gerne Verber Drke
A t S'ONTA(...1.11S Medical eterf.,MK 55374 11
EA:(25 • OEM Products
hone,76.4-42A-4990
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1■.DUS I.RI Recreational rat: 76211
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SERVFD
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http://preferredpowder.comiabout_us/ 5/27/2013
Preferred Powder Coating I Specialists in Powder Coating I Rogers. Minnesota Page 1 of 2
� E ERRED
POWDER • coartrtG
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• Powder Coating Specialists in Powder Coating
• Pre trc:si sent
• l!hosoli,;is i?lee How the process works
• 'x ry ice (t&1thilit5.5 When we powder coat metal,we electrostatically apply a dry coating of
• f exture aA1-inisiips pigment to a product.then cure it under heat to allow the pigment to spread and
form an even-coated finish.
•
Unlike conventional liquid paint,powder coating does not require toxic solvent
to keep the pigment in a liquid suspension form,thereby eliminating the need
for using,storing.and disposing of harmful chemicals.
In addition.powder coating creates a more durable finish that is tougher and
lasts longer than conventional paint.Preferred Powder Coating focuses 00
quality and customer service during the entire powder coating process.
Our work features:
• Cost-effective finish-With assistance in product development to deliver
the best finishing process for your budget.Conveyor line with auto guns
or Batch systems available to meet most production needs.
• Full service--From pre-treatment and wash.to application,light
assembly in-house silk screen inspection.anti-skid applications.
packaging,logistics,and documentation.
• Quality control --Preferred provides full-scale documentation tailored to
your exact quality control standards.
• Quick turnaround—From prototype`to production runs,our large-scale
production area enables us to turn around y our project quickly.
• Short-term storage--Our warehouse allows us to easily receive.store.
track and ship your products.
• Expansive capabilities--Preferred is able to handle high-or low-volume
production for customers.
QUICK FIND --n .-- -- INDUSTRIES SERVED PREFERRED POWDER COATINU
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• Dic*Foundry Castings
:1 BO # l,'ti €CIN't:ACI'U 13.231 George Weber Drive
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SERVED
http://pre ferredpowder.con c/powder_ oating! 5/27/2013
Preferred Powder Coating 1 Mission Statement and Values I Rogers, Minnesota Page 1 of 2
1.V witliji:s1..,,As2Loli-,
PREFERRED
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• AfisSiern Mission Statement and Values
• Quality&Performance
• Our i aied:r+' Mission statement
• Fntplov rem. Preferred Powder Coating is committed to providing cost-competitive work by
• S.__I.I.As using state-of-the-art equipment with an emphasis on customer service.
Preferred Powder Coating is a-green”company dedicated to the development
and utilization of ISO fundamentals grounded in our core values.
Vision statement
Preferred strives to become a respected local.regional and national resource in
the metal powder coating industry. We will endeavor to preserve our natural
environment while providing high-quality.cost-effective serti ices for our
customers.Our employees will stay current with the latest methods and be
encouraged to develop their skills and creativity.1'mferred"s top•ealiber
customer service wili be the ibundation on which will continue to build and
expand our business.
Our values
Several key values serve as a ibundation for all that we do at Preferred Powder
Coating.
Environmental preservation and conservation-Our work is done in an
environmentally sensitive manner.Powder coating.unlike liquid coatings,do
not produce hazardous solid waste or hazardous air pollutants.
Employee safety- fhe safety and health of our employees is critically
important.We airn to have a healthy.safe workplace by providing necessary
training.well-maintained equipment.and employee accountability on the job.
Teamwork-Each employee is entitled to respect for their talents and is
appreciated as a critical part oldie Preferred team.
Being accountable-All employees will take responsibility for errors and team
from their mistakes.Important intonnation gathered from errors will be input
into past master files to ensure there will not be repeatable mistakes.
Positive attitude.- Negativity is not welcome in our workplace.Employees
should maintain a positive attitude in all interactions with fellow employees
and our customers.
Valuing education--Our cornpans supports employees eslto choose to pursue
new eduattional opportunities.Additional training benefits the entire company
and leads to a more productive workplace.
http://pre erredpowder.comfabout usimission! 5127/201
Preferred Powder Coating; Mission Statement and Values? Rogers. Minnesota Page 2 of 2
Being innovative-Emplo}cgs are encouraged to think of new and innovative
ways to improve service,cost and quality for our customers.
Taking initiative—Our crnplo.ces can f_cl empowered to be self-motivated
and strive to achieve goals in their professional and personal lives.
Valuing relationships-Maintaining relationship;with our customers is a
critically important part odour business. They must be built with a sense of
mutual respect and courtesy,with a focus on tlx:needs of the customer.
Honesty—Preferred employees will conduct themselves in an honest and
trustworthy manner with all clients and fellow employees.
QUICK FIND INDUSTRIES SERVED PREFERRED POWDER C'OA I ING
II Nil t 111:1.E fit
• Die.l'ourtdry Castings PeCertcd Powder Coathis
E3OI I t ` t( N I l I t_S 152x1 Cemyte Weber Drive.
• Medical Roe! StN 95374
I't>WDI u r r l l?v(; FAQS • OEM Products
• Recreational Hme 6.r-42S-4490
INDUS!`I till `. r41 Frste-RZrl I f F t
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http:!ipreferredpowder.com about_us-missionf 5/27.-201
Preferred Powder Coating 1 Industries Served Rogers, Minnesota. Page 1 of 1
P O W O E R • C O A 7 1 N O
Calf us at (763)428-4990
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1{06. ABOUT u5 PaWDER COATING ;I_ENVE.1,3 'vAf Lt"r4S courA .)us
• Industries Served Premium powder coating
Preferred Powder Coating works with a variety of industries that require
premium powder services for their quality products.The use of our high-
quality facility helps their products stand out from the crowd.We specialize in
the following:
• Aeronautics
• Air PurilicaIion
• Agriculture
• Athletic equipment
• ATV
• Automotive
• Computer
• Construction
• Die casting
• l'oundr.castings
• Hangars and shelving
• Hardware
• Medical Equipment
• ()EM
• Point-of-purchase displays
• Recreational
• Retail
• Sheet metal
• Wire products
QUICK FIND . .. —. INDUSTRIES SI::RVf:D PRI:I l:R12EI)POWDER(`(3A FI\Ci
HOME (IA I t E RY
• Dicifitundr} Castings rieterred Powder ce3nb,g
1;5 • Medical 33143 GeorgeWeber Olive
Rogem,%IN S537i
POW t)1Itts)AIl\U I.SIJ • O1.:Ml'ruttuets
bun 63-438-49943
• Recreational •x 634188141? US .R.!
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http://preferredpow der.cotnIind.ustries_served% 5/27/2()13
Dan Bosshart,co-owner of Preferred Powder Coatings,has built a career managing and operating large
multi-faceted organizations within both the manufacturing and military sectors. Dan's expertise in
communications, mathematics,and a professional management style has proven beneficial for the last
16 years as he performed various positions including; Director of Operations,VP of Operations and
President of medium to large sized manufacturing companies within the sheet metal,die cast,
machining,and finishing industries.
Dan's previous life,as a 20 year retired Lieutenant Colonel in the US Army,with 12 years of command
experience,allowed him to hone his skills as he managed everything from single building plants to
53,000 acre Federal Military complexes throughout the world.
Dan holds a Bachelors of Science degree from Clemson University majoring in both Math and Physics.
Dan has enjoyed various educational endeavors such as becoming a certified ISO and QS Auditor/Quality
manager and working in conjunction with W. Edwards Deming to create a TQLM—Total Quality
Leadership Management doctrine for the US Army. He is also a graduate of the Stephen Covey
Leadership Center in Sundance Utah.
Dan is a noted wrestler and softball player but his real passion is ice fishing for walleye at the Westwind
Resort on Red Lake.
11 March 2O13
Elk River Economic Development Authority
Suzznne Fischer, EDA Executive Director
13065 Orono Parkway
Elk River, MN 55330
RE Letter of Commitment for Elk River Forgivable Loan Application
Dear Ms. Fischer,
This letter is my official pledge of commitment to complete my approximately 70,000 square foot
building for Preferred Powder Coating no later than November 2013.
I am hoping to break ground on this project in August of 2013.
If you have any questions or need additional information, please do not hesitate to contact Annie
Oeohart. DoohIan Group, at612'584-07S5.
I appreciate your time,
Respectfully,
Dan Bosshart
Vice President of Operations, Preferred Powder CoatIng, LLC.
FIRST NATIONAL BANK of E]k River ^»Main Sweet
mm none 763;',4',ti"
hei 703 44 I 5'7E4
l— ---- --- --' -' - ' - -' -
May 24th,2013
City of Elk River
13065 Orono Pkwy,
Elk River,MN 55330
RE: Preferrn6 Powder Coating, Inc.
lax abatement application
To whon it may concern:
i have been the banking relationship manager for Preferred Powder Coating for the past two years.
asd or my examination and analysis of past financial performance arid projected financial
perhormance provided to First National Bank of Elk River, Preferred Powder Coating demonstrates the
ability to service debt repayment necessary to support the building project proposed in their application
with the City of Elk River dated May 28th,2013.
The debt structure reviewed consisted of 53,547,000 real estate debt based on a 25 year amortization
and S1'OUO,OOOequip/nent note based a1O year amortization.
While Preferred Powder demonstrates the ability to service debt payments on the debt,I do
anticipating a substanti;--A equity gap requiring alternative funding sources including the utilization of the
SBA 504 program and program like the Tax Abatement program to make the project a reality. This
letter is only an assessment of Preferred Powders ability to service debt outlined in the application and
not a commitment to lend from First National Bank.
If you have any questions please fee!free to contact me at jou convenience
Sincerely
~�r
C �^ °~� ^�'
Chad A.Vitzthurn
Senior Vice President
First National Bwk of Elk River
.
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•
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Minnesota Business Name
PREFERRED POWDER COATING LIC
Business Type MN Statute
Limited Liability Company(Domestic) 3228
File Number Home Jurisdiction
3398194-4 Minnesota
Filing Date Status
06/30/2009 Active/In Good Standing
Renewal Due Date: Registered Office Address
12/31/2013 1369 Mississippi Str
New Brighton MN 55112
• USA
Registered Agent(s) Manager
Lloyd Peterson Dan Bosshart
13251 George Weber Drive
Rogers MN 65374
• USA
• Principal Executive Office Address
13251 George Weber Drive
Rogers MN 65374
• USA
Filing History Renewal History ).
http://mblsportal.sos.state.mn.us/Business/SearchDetai ls?fi I ingGuid—b91-3793 f-94d4-e011-a... 3/4/2013
ENGINEER'S ESTIMATE-ALTERNATIVE NO.'I
PREFERRED POWDER COATING
CITY OF ELK RIVER
_ ..
T r- _
1 I
ITEM SPEC. UNIT ES
Na REF. DESCRIPTION
---1 UNIT COST
TOTAL TOTAL
ESTIMATED ESTIMATED
COST
7021,501 MOBILIZATION LUMP SUM 515,000.00 1 515,000
2 2104501 REMOVE CURB LIN FT $3.00 156 5468
. _.,
3 2104.604 SALVAGE CONCRETE PAVEMENT _ SO YD $50.00 44 52.200
2105.501 COMMON EXCAVATION(CV)(P)
El
Cu YD
2105.506 MUCK EXCAVATION
CU YD $5.00 16,727
56.00
2,013 $83,635
$12.078
ing 2105.521 GRANULAR BORROW(.V) CU YD 59.00 8,962 580.658
MI 2211.501 AGGREGATE BASE CLASS 5 TON 512.50 3.590 $44.875
8 2357.502 BITUMINOUS MATERIAL FOR TACK COAT GALLONS $3.00 524 $1.572
9 2360.501 TYPE SP 9.5 WEARING COURSE MIXTURE 12.0) TON 568.00 1,171 $79,028
-I
10 2360.501 TYPE SP 12.5 NON WEARING COURSE MIXTURE(2,61 TON • 565.00 1,489 596,785
.,-
IMO. 2411.507 CONCRETE FLUME EACH $400.00 2 $800
2411.618 MODULAR BLOCK RETAINING WALL
IIN
2531.501 CONCRETE CURB&GUTTER DESIGN 6612 LI
SQ FT
_ $20.00
_I N FT
$11.00 4,130 $82,600
2,366 $25,026
mai 2531.507 6"CONCRETE DRIVEWAY PAVEMENT SQ FT $4.00 1,000 54.000
2531.604 7"CONCRETE VALLEY GUTTER SO YD $40.00 64 52.560
16 2563.601 TRAFFIC CONTROL LUMP SUM $500.00 1 5500
Ma 2571.501 INFILTRATION POND PLANTINGS LUMP SUM 529.000.00 1 - 520,000
nom 2573.502 SILT FENCE,TYPE MACHINE SLICED - LIN L. 53.00 3,407 $10,221
19 '2573.530 STORM DRAIN INLET PROTECTION EACH 5500.00 1 $500
20 2573.602 TEMPORARY ROCK CONSTRUCTION ENTRANCE EACH 51.000.00 1 $1,000
21 2575.502 WETLAND SEED MIX WITH COVER CROP ACRE 55.000.00 1.2 56,000
all 2575.505 SODDING TYPE LAWN
SQ YD i---1 $3.50 3,510 $12,285
2575.532 FERTILIZER TYPE 1 POUND $1.00 220 $220
ign 2582.502 4'SOLID LINE YELLOW•PAINT LIN FT $0.50 2,100 51.050
in2501.515 24 RC PIPE APRON EACH $750.00 1 $750
2503.541 15'RC PIPE SEWER DESIGN 3006 Cl..V LIN FT 528.00 116 $3,248
Km 2503.541 24"RC PIPE SEWER DESIGN 3006 CL.III UN FT $48.00 22 $1,056
28 2503.602 CONNECT TO EXISTING STORM SEWER EACH $500.00 1 $500 -
29 2506.502 CONSTRUCT DRAINAGE STRUCTURE DESIGN SPECIAL! EACH $1,000.00 1 51,000
30 2506.502 CONSTRUCT DRAINAGE STRUCTURE DESIGN SPECIAL 2 EACH $1,500.00 2 $3,000
Nam 2506.502 CONSTRUCT DRAINAGE STRUCTURE DESIGN SPECIAL 3 . EACH 52,000.00 1 $2,000
2506.502 CONSTRUCT DRAINAGE STRUCTURE DESIGN 48-4020
gi
EACH
2506.516 CASTING ASSEMBLY
EACH $1,500.00 1
5500,00
2 51,500
$1,000
Egg 2511.501 RANDOM R)PRAP CLASS II-FIELD STONE CU YD $80,00 35 $2,800
wag 2503.602 PIPE PLUG -__ EACH $100.00 1 $100
36 2503.602 6")(6-PVC WYE SDR 26 EACH 5200.00 1 5200
Ma 2503.602 CONNECT TO EXISTING SANITARY SEWER . EACH $500.00 1 $500
38 2503.602 6'CLEANOUT ASSEMBLY EACH S750.00 1 5750
39 2503.603 6 PVC SANITARY SERVICE PIPE SDR 26 LIN FT $20.00 80 . $1,600
40 2503.608 DUCTILE IRON FITTINGS POUND $3.00 464 $1,392
2503.608 6"WATERMAIN DUCTILE IRON CL 52 UN FT $28.00 442 $12.376
a2503.608 8"WATERMAIN DUCTILE IRON CL 52 LIN FT $33.00 102 $3,366
2504.602 5"GATE VALVE AND BOX EACH $1,300.00 1 $1,300
gun 2504.602 8'GATE VALVE AND BOX EACH $1,800.00 1 51,800
45 2504.602 CONNECT TO EXISTING WATERMAIN EACH $500.00 1 $500
48 2504,602 HYDRANT EACH $3,200.00 1 53,200
47 2504.603 HYDRANT RISER LIN FT $545.00 1 5545
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