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7.1. SR 10-20-2014
Ells -Vft _ Request for Action River To Item Number Mayor and City Council 7.1 Agenda Section Meeting Date Prepared by Public Hearinj October 20,2014 Jeremy Barnhart,Deputy Director, CODD Item Description Reviewed by Tax Abatement and Business Subsidy for Cal Portner, City Administrator Stonesthrow Properties,LLC (Coin-Tainer) Reviewed by Action Requested Hold a Public Hearing to consider business subsidies in the form of a Tax Abatement and a microloan for over$150,000 for Stonesthrow Companies,LLC. Background/Discussion The city has received applications for tax abatement and a microloan from the city's 4`''microloan program, to support the acquisition of the improved property at 17834 Industrial Circle NW and the future expansion of Coin-Tainer, a coin wrapper and raffle ticket printer with a 65% market share nationally. Included in the business subsidy package is a microloan being considered by the EDA, although that funding may not be distributed until DEED approves the loan program. The maximum award eligible under this microloan is $200,000. Therefore,the public hearing considering the business subsidy should consider the maximum amount requested, $543,750. Coin-Tainer's operations were located in Milaca until their facility was destroyed by fire in January of 2014. They initially relocated to vacant space on Jarvis Street and have now found a desired long-term home at 17834 Industrial Circle. They plan to purchase the property through a contract for deed which will allow for expansion as existing leases terminate. The tax abatement and microloan will allow Stonesthrow Properties,LLC to purchase the property and provide operating capital for Coin-Tainer Co.,LLC to rebuild the business. Stonesthrow is owned by Dave Walters and his wife,and Coin-Tainer is owned by Dave Walters. State Statute requires local government agencies to hold a public hearing to receive comment on tax abatement and business subsidies. Tax Abatement The attached memos from Springsted summarize the analysis completed to date. The project includes the retention of 26 existing jobs and the creation of 10 new jobs. The 26 jobs were not in the City of Elk River in January of 2014. The project scored 30,which is the low end of the moderate desirability range. Our Financial Advisor,Mikaela Huot,will be at the meeting to support the analysis. Staff s review assumes abating taxes of the entire property for 12-15 years. The county policy allows for abatement for only the incremental change in value of the property,pre and post improvement. P O IN E 8 E U A Y 1 CIA R Based on our analysis,it appears that Coin-tainer would not remain within the city without the assistance. Microloan The applicant applied for the 4t''microloan,which offers up to $200,000 in secondary financing with flexible job creation goals. The Finance Committee will review the application based on the terms presented to DEED,with a recommendation moving forward to the EDA based on that criteria. Should DEED have substantial changes,the Finance Committee and the EDA would review the modifications to the program, and these impacts to the Coin-Tainer microloan application at a later date. EDA Recommendation The EDA recommendation will be provided verbally. Financial Impact Up to $343,750 in city tax abatement assistance, to be distributed"pay as you go" for 15 years. This abates the entire city share of taxes on the property. A request has also been made to Sherburne County,up to $65,832 over 12 years. That request will be considered in a public hearing scheduled for October 28. Attachments ■ Springsted Analysis ■ Estimated financing projections (October 10, 2014) ■ Microloan application review (October 9, 2014) ■ Project analysis (October 10, 2014) ■ Tax Abatement Scorecard ■ Submitted Application materials, some of which is private data, available upon request: ■ Applications ■ Business Plan ■ Financial statements ■ Exbibits N:\Public Bodies\Agenda Packets\10-20-2014\Final\x7.1 sr Tax abatement and business subsidy for Coin-tainer.docx Ells -Wft _ Request for Action River To Item Number Economic Development uthority Finance Committee 4.1 Agenda Section Meeting Date Prepared by General Business October 13,2014 Jeremy Barnhart,Deputy Director, CODD Item Description Reviewed by Stonesthrow Properties,LLC (Coin-tainer) Tax Abatement and Microloan review Reviewed by Action Requested Consider and provide recommendation to the EDA on the following Coin-tainer Co.,LLC and Stonesthrow Companies,LLC applications: Tax Abatement (Stonesthrow Companies,LLC) Industrial Development Micro Loan Fund Application (Coin-tainer Co.,LLC) Background/Discussion The City has received an application for tax abatement and the city's 4`''microloan program. The microloan program has not been approved DEED, though that is expected at any time. The County has also received a tax abatement application; they will consider that application on October 14`'',with formal review anticipated for October 28`' Coin-tainer is a coin wrapper and raffle ticket printer with a 65% market share nationally. Coin-tainer's operations,previously located in Milaca,were destroyed by fire in January 2014. They relocated to vacant space on Jarvis initially,and have found a long term home at 17834 Industrial Circle,with plans to purchase the property through a contract for deed, allowing for expansion as existing leases terminate. The tax abatement and microloan will allow Stonesthrow Properties,LLC to purchase the property and provide operating flexibility for Coin-twiner Co.,LLC (in common ownership with Stonesthrow Properties,LLC) to rebuild the business. Tax Abatement The attached memos from Springsted summarize the analysis completed to date. The project includes the retention of 26 existing jobs and the creation of 10 new jobs. The project scored 30,at the low end of the moderate desirability range. Mikaela Huot will be at the meeting on Monday to verbally support the analysis. Staff s review assumes abating taxes of the entire property for 12-15 years. The County policy allows for abatement for only the incremental change in value of the property,pre and post improvement. Based on our analysis,it appears that Coin-tainer would not remain within the city without the assistance. PawIR10 0 1 CIA R Microloan The applicant has applied for the 4`h microloan,which offers more up to $200,000 in secondary financing with more flexible job creation goals. The Finance Committee is asked to review the application based on the terms presented to DEED,with a recommendation moving forward to the EDA based on that criteria. No microloan funds may be distributed until DEED approves the program. Should DEED have substantial changes, the Finance Committee and the EDA would review the modifications to the program, and these impacts to the Coin-twiner microloan application at a later date. Attachments ■ Springsted Analysis ■ Estimated financing projections (October 10, 2014) ■ Microloan application review (October 9, 2014) ■ Project analysis (October 10, 2014) ■ Tax Abatement Scorecard ■ Submitted Application materials ■ Applications ■ Business Plan ■ Financial statements ■ Exhibits N:\Public Bodies\Agenda Packets\10-20-2014\Final\x7.1 atl Cointainer 10-20-14.docx Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul,MN 55101-2887 Springsted Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com MEMORANDUM TO: Jeremy Barnhart, Community Operations and Development-Deputy Director FROM: Mikaela Huot,Vice President/Consultant Julian Bradshaw,Analyst CC: Dan Weber, Economic Development Specialist, Sherburne County DATE: October 10, 2014 SUBJECT: Estimated Financing Projections for Proposed Tax Abatement: Stonesthrow The City of Elk River has requested that Springsted provide preliminary tax abatement revenue projections for the commercial property located at 17834 Industrial Circle NW, for which a tax abatement project would be created to capture taxes generated from the existing building through an annual abatement levy. The applicant, Stonesthrow Properties LLC, currently occupies a portion of the building through a temporary lease and is considering acquisition of the building through a contract for deed and relocating permanently at the site. Stonesthrow Properties LLC would receive a pay-as-you-go note in which the City and County (subject to policy and approvals) would reimburse the business for certain costs associated with acquisition of the property and any subsequent improvements. Additional assumptions and terms of the proposed abatement are outlined further below. Tax Abatement The statutory language defining tax abatement is contained in MN Statutes 469.1812 to 469.1815. Section 469 refers to the capture or deferral of property taxes due as"tax abatement." Under Minnesota law, taxes due on real property subject to tax abatement must still be paid as due. If tax abatement is in place, the appropriate portion of the taxes can be captured for development purposes. Just what the appropriate portion is depends on which governmental entities hold public hearings and adopt abatement resolutions. A participating city, county, or school district is required to act separately to determine the use of its share of property taxes. Unlike tax increment, tax abatement can be used to capture taxes on land and existing buildings as well as new improvements. Tax abatement also does not statutorily require a `but for' analysis; however the City's current policy requires this analysis be done. The captured taxes are used to offset the costs agreed to under an abatement agreement. A city may grant a tax abatement, by contract or otherwise, of the taxes imposed by the city on a parcel of property, which may include personal property and machinery, or defer the payments of the taxes and abate the interest and penalty that otherwise would apply, if: City of Elk River, Minnesota Stonesthrow Properties LLC Proposed Tax Abatement Project October 10, 2014 Page 2 • it expects the benefits to the city of the proposed abatement agreement to at least equal the costs to the city of the proposed agreement or intends the abatement to phase in a property tax increase, as provided in clause(2)(vii); and • it finds that doing so is in the public interest because it will: • increase or preserve tax base; • provide employment opportunities in the political subdivision; • provide or help acquire or construct public facilities; • help redevelop or renew blighted areas; • help provide access to services for residents of the political subdivision; • finance or provide public infrastructure; • phase in a property tax increase on the parcel resulting from an increase of 50 percent or more in one year on the estimated market value of the parcel, other than increase attributable to improvement of the parcel; or • stabilize the tax base through equalization of property tax revenues for a specified period of time with respect to a taxpayer whose real and personal property is subject to valuation under Minnesota Rules, chapter 8100. Tax Abatement Assumptions Springsted made certain assumptions to calculate the estimated amount of tax abatement revenue generated by the proposed new project. Those assumptions include the following: • City of Elk River proposed tax abatement • Abate existing land and building value: • PID: 75-659-0110 • EMV as of Jan. 2, 2015 for taxes payable 2016 is$2,234,500 ■ Updated value estimate provided by Sherburne County • Sherburne County proposed tax abatement • Abate incremental building value • P I D: 75-659-0110 • EMV as of Jan. 2, 2015 for taxes payable 2016 is$2,234,500 • EMV as of Jan. 2, 2014 for taxes payable 2015 is$1,743,400 • Incremental EMV for abatement is$500,000 • Estimated Market value at Completion o According to the County(Dan Weber)the Estimated Market value of the completed building will be $2,234,500 for taxes payable 2016 • Abatement term and participation • City: 12 years of total value or • City: 15 years of total value and 0 County 12 years: Incremental value City of Elk River, Minnesota Stonesthrow Properties LLC Proposed Tax Abatement Project October 10, 2014 Page 3 • First Year of Abatement o Assume estimated values assessed in January of 2015 for taxes payable in 2016 • 2014 tax rates remain constant through term (Rates Provided by Sherburne County) • City: 48.544% • County: 54.861% • School: 51.286% • Other: 4.987% • Total 159.678% • Class rates remain constant through abatement term • Fiscal disparities contribution -NA • 1%annual market value inflator assumed • Present Value Assumptions 0 4% Discount Rate o Dated Date of December 31, 2014 Tax Abatement Revenue Estimates Stonesthrow Properties, LLC. 12 Year City and 15 Year City and Abatement Project 12 Year County 12 Year County City Share of Revenues $270,769 $343,750 County Share of Revenues $65,832 $65,832 School District Share of Revenues $0 $0 Estimated Total Revenue $336,601 $409,582 Estimated Present Value of Total Revenues $252,168 $292,702 The above table illustrates the projected net revenues that tax abatement would generate for the proposed terms. The maximum abatement, based on the assumptions outlined above is projected to generate$270,769 with City only participation for 12 years, $336,601 with City and County participation for 12 years, $343,750 with City only participation for 15 years and $409,582 with City participation for 15 years and County participation for 12 years. All participation levels and amounts would be subject to individual policy and Board decisions following anticipated public hearings. Revenues captured through tax abatement and provided as reimbursement to the property owner for certain costs must be used only for those properties that benefit from the tax abatement. Thank you for the opportunity to be of assistance to the City of Elk River. Please let us know how we can best assist you as this project moves forward and should you have any questions please feel free to contact us CO N LO - 0 0 0 0 0 0 I-- N O O O 00 O O M O M 00 - I-- 19t Mqqt 0 0 CB o O N L 00 N W O M r- 0 T- > N C:) q-* CO N - - 0 0 0 00 00 I-- N d C cu M O N N N N N N N - - - - - LO Q Q � c 0 CO Nq9t I- CO 0 0 0 O O O C - M LO I- O N LO 00 - q9t 00 N O (2) M O Nqqt 0 O - M 0 M O M 0 -cu X E O^ (o I- r- r- r- r- 0o 0o 0o 0o O O 0 0 ~ a) N N N N N N N N N N N N (M c Q .� _ U O O O O O O O O O O O O O O O O E O N o E X E o o . c cu O N 0') LO Q U U) 0 0 0 0 0 0 0 0 0 (O (O (O O O O N E 00 00 00 00 00 00 00 00 00 00 00 00 co >+ o 00 0) co +� o wi X N 0 000. � �} cu cu U LO � Q .. O I- 0 00 r- LO LO 00 CO O O O O O O E C M * 0 00 M 0 O N 0 D 0 0) -00- M O Nqq 0 00 - M (Q 00 I� CX6 E T �. 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O W T T T T T T T T T T T T T T T d U a a Springsted Incorporated 380 Jackson Street, Suite 300 Springsted Saint Paul,MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com DRAFT MEMORANDUM TO: Members of the EDA Finance Committee Jeremy Barnhart, Community Operations and Development-Deputy Director FROM: Mikaela Huot,Vice President/Consultant Julian Bradshaw,Analyst DATE: October 9, 2014 SUBJECT: Coin-Tainer Co., LLC.—Microloan Fund Application Review Summary At the request of the City of Elk River, Springsted has undertaken a review of the Coin-Tainer Co., LLC. Microloan Fund application. The purpose of this review is to understand (based upon the provided information) if the applicant meets the guidelines set forth by the City of Elk River's Economic Development Microloan Fund policy. According to Coin-Tainer Co., LLC, the company is a coin, currency, and raffle ticket roll manufacturer and wholesale/retail distributor. Coin-Tainer Co., LLC proposes to finish installing new equipment to restore production capability lost due to damage caused by a fire in another community. In order to aid in achieving the proposed redevelopment and permanent relocation in the City, the company has requested a microloan in the amount of$200,000 through the Jobs Incentive Program of the City of Elk River's Economic Development Microloan Fund program. Springsted has reviewed the following materials with regard to the above referenced project: • Coin-Tainer Co., LLC. Microloan application, submitted to the City on August, 28 2014 • Balance sheets &profit and loss statements from 2012 through July 2014 Approach Coin-Tainer Co., LLC. has provided Springsted, through the City, with its microloan application and related materials The goals of Elk River's microloan program, as stated in the policy guidelines, is to provide low interest, long-term (i.e. greater than one year) loans as incentives for new industrial and commercial development within the City of Elk River and to encourage commercial and retail business owners in the Downtown District to rehabilitate their existing buildings. The following review will outline the loan eligibility criteria as presented in the Economic Development Microloan Fund Policy and identify if the applicant meets those guidelines. Springsted's initial determination that the applicant has fulfilled the necessary criterion is based upon the available information (application information and related materials provided by the applicant and the City) and the City's current policy guidelines. We have focused Public Sector Advisors City of Elk River, Minnesota Coin-Tainer Co., LLC.Application Review October 9, 2014 Page 2 specifically on the project eligibility, loan security and guarantee requirements, eligible activities, business eligibility, and financial feasibility requirements as stated in the guidelines. The review is meant to provide a snap shot of the above referenced information and should be used as a tool to enable the City to form an opinion as to the applicant's suitability for the microloan program and ability to proceed with the project and honor any commitment made to the City of Elk River. Note on the Microloan Policy Currently the City of Elk River has approved an amendment to the microloan policy that will allow the City to loan up to $200,000 under a fourth micro loan which is referred to as the job incentives program. State approval through the Department of Employment and Economic Development(DEED)is pending and any loan that is made will be contingent upon verification of the required approvals.Any substantial changes to the policy may require an updated review of the applicant to determine eligibility. Program Objectives Applicant must demonstrate how the proposed activities will meet at least one of the following objectives: 1. The project contributes to the fulfillment of the city's approved and adopted economic development and/or redevelopment plans. 2. The project prevents or eliminates slums and blight. 3. The project increases the local tax base. 4. The project brings a structure into compliance with an existing building code violation. If the project for which loan funds ha ve been requested is completed as presented the company has estimated it would retain 26 and create 70 newJobs in the City. The project would maintain long-term occupancy in a partially vacant building and value of the property would increase which should increase the local tax base. Project Eligibility Requirements For a project to qualify under the proposed fourth micro-loan (Jobs Incentive Program)of the City of Elk River Economic Development Microloan policy an applicant must meet certain criteria: 1. Must create one new full-time job for each$20,000 loaned, retain one new full-time job for each$10,000 loaned, or combination of retainage and creation to meet the requirements: According to the applicant, Coin-Tainer plans to create 70 new_jobs and retain 26 current jobs 2. All new jobs must be created within 2 years and retained for the period of the loan; According to the applicant, the pro_ject plans to create 70 new_jobs 3. Created and retained jobs must pay greater than$15.00 per hour or 150%of State or Federal minimum wages (whichever is greater); According to the applicant, the project plans to create 70 new_jobs at$75.00 per hour 4. Any loans shall meet the City of Elk River Business Subsidy Policy for the creation of new jobs as well as a 5 year location requirement; City of Elk River, Minnesota Coin-Tainer Co., LLC.Application Review October 9, 2014 Page 3 The minimum wage for a_job to be considered a new or retained job shall be the greater of$75.00 per hour or 750%of state or federal minimum wage, whichever is greater, exclusive of benefits required by law. According to the applicant, the project plans to create 70 newJobs at$75.00 per hour 5. Eligible costs must be used for costs related to job creation and retention; Funds will be used to finish installing equipment and restore production capabilities. Loan Security and Guarantee Requirements The City's microloan policy indicates that prior to the City granting a loan to a proposed business,that the proposed project must meet certain loan security requirements. These requirements are: 1. 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; 2. Applicant must demonstrate the financial means to repay the loans,as determined by the Economic Development Authority; 3. Whenever possible, personal guarantees will be made part of any loan agreement; 4. Key person life insurance may be required as determined by the EDA Finance Committee based on loan amount and company ownership partners; Eligible Activities To qualify for a micro loan the applicant must utilize the funds for the specific purposes outlined in the City's Economic Development Microloan policy. Funds may be used by the borrower for costs related to job creation and retention as a result of the project. According to the policy, loans may be used for the following activities: 1. Building construction 2. Land acquisition 3. Machinery 4. Furniture,fixtures, and equipment(FF&E) 5. Renovation and modernization of buildings 6. Exterior renovation of retail, commercial and industrial buildings 7. Public infrastructure needed for economic development expansions 8. Investment real estate with a minimum of 50%of the space pre-leased According to Coin-Tainer Co., L L C' application materials the company plans to utilize microloan funds to aid in the purchase of equipment which falls within the policy. City of Elk River, Minnesota Coin-Tainer Co., LLC.Application Review October 9, 2014 Page 4 Business Eligibility In addition to having an eligible project a business must also meet certain criteria before it is deemed eligible to receive forgivable loan funds. According to the Economic Development Microloan Fund Policy, to be eligible for a microloan a business must meet the following 1. Business must be a for-profit corporation, partnership or sole proprietorship; After reviewing Coin-Tainer Co., LLC's application materials the company appears to be a for-profit enterprise. 2. Business must be a small business as defined by the small business administration; Based upon the application materials provided by the applicant, the company appears to meet the definition of a small business as defined by the small business administration. We are waiting on additional information from the applicant to confirm this status. 3. Business must have a positive net worth; It is important to note that the latest(full years)financial statements provided by the company are for the year ending December 37, 2073. In addition we have received partial year information through July 37, 2074. As such this determination is being made based upon the available information at that time. Based upon a review of the financial information submitted by the company, Coin-Tainer Co., L L C had a positive net worth in December of 2072, a negative net worth as of December 37, 2073, and a positive net worth as of July 37, 2074, 4. Business must be an industrial, manufacturing, or technology-based industry; A review of Coin-Tainer Co., LLC's application materials confirms that the company fits into the description of an industrial, manufacturing, or technology based industry. 5. Religious, political, casino, sports facilities and pornographic enterprises are not eligible to use the Economic Development Forgivable Loan Program. Coin-Tainer Co., L L C does not appear to be a religious, political, casino, sports facilities or pornographic enterprise. Financial Feasibility According to the forgivable loan program guidelines the financial feasibility criterion are meant to assess availability of funds, private involvement,financial packaging and cost effectiveness. These criteria are: 1. Appropriate ratio of private funds to microloan funds Stonesthrow Companies, L L C is intending to acquire the existing building that Coin-Tainer Co., L L C is currently occupying and continue leasing that facility to Coin-Tainer Co., L L C. Acquisition of the building is estimated to be$2.6M and Stonesthrow Companies, L L C is planning to finance the purchase through a contract for deed. Stonesthrow Companies, L L C has requested tax abatement assistance from the City of Elk River and Sherburne County to assist with the acquisition. The microloan funds of$200,000 would be used to purchase equipment with a total project cost estimate for the two companies to be$2.8M.Assuming Stonesthrow Companies, L L C receives tax abatement assistance from the City and County, approximately City of Elk River, Minnesota Coin-Tainer Co., LLC.Application Review October 9, 2014 Page 5 80%of the total pro_ject costs would be financed with private dollars which meets the minimum criterion (50%)of the City's policy. 2. Sufficient cash flow to cover proposed debt service as demonstrated by financial statements and projections. Stonesthrow Companies, L L C has requested tax abatement assistance from the City of Elk River and Sherburne County to assist with acquisition of the facility and provide sufficient annual revenues to support operating costs of the building. Coin-Talner Co., LLC will be leasing a portion of the building from Stonesthrow Companies, LLC, The company has positive net worth through July 2074 and has indicated it is able to provide positive cash flow. 3. Ability to demonstrate positive net worth It is important to note that the latest(full years)financial statements provided by the company are for the year ending December 37, 2073. In addition we have received partial year information through July 37, 2074. As such this determination is being made based upon the available information at that time. Based upon a review of the financial information submitted by the company, Coin-Tainer Co., LLC had a positive net worth in December of 2072, a negative net worth as of December 37, 2073, and a positive net worth as of July 37, 2074, 4. Letter of commitment from applicant pledging to complete the project during proposed project duration. The applicant has stated receipt of the microloan funds and tax abatement assistance to Stonesthrow Properties, LLC will secure the ability to acquire the facility and permanently locate in the City of Elk River. 5. Letter of commitment from other financing sources stating terms and conditions of their participation. Stonesthrow Companies, LLC is intending to acquire the building through a contract for deed as a means of financing the project. The micro%an funding to Coin-Tainer Co., L L C pro aides additional resources to invest in the project. 6. Sufficient collateral Further discussions with the applicant have indicated it has sufficient collateral. Conclusion After examining the micro loan application materials submitted by Coin-Tainer Co., LLC. and in conjunction with the Economic Development Micro Loan Program guidelines, Springsted concludes that 1 appears to be in compliance with the program eligibility requirements (for which information was provided) as outlined in this memo and at the time of review. The fourth loan of the City of Elk River's Economic Development Micro Loan (Jobs Incentive Program) is currently under review by DEED. Review of the applicant for receipt of the Jobs Incentive Micro Loan Program is subject to approval by DEED. Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul,MN 55101-2887 Springsted Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com MEMORANDUM TO: Jeremy Barnhart, Community Operations and Development-Deputy Director FROM: Mikaela Huot,Vice President Julian Bradshaw,Analyst DATE: October 10, 2014 SUBJECT: Stonesthrow Properties, LLC. —Project Analysis The City of Elk River has asked Springsted to evaluate a tax abatement request for assistance submitted by the developer, Stonesthrow Properties, LLC. The developer proposes to purchase the commercial property located at 17834 Industrial Circle NW for the purpose of leasing to Coin-Tainer Co., LLC (in which the developer has an ownership interest) and four other commercial tenants (some of which are existing businesses in the building with current leases).According to the developer, purchasing the property would support the retention of Coin-Tainer in the City of Elk River and would retain 26 existing jobs and create a minimum of 10 new full time positions. The purpose of this memo is to summarize the analysis that Springsted prepared, including the estimate of tax abatement revenues for the project and to assist with determining whether the development is likely to proceed "but for' the requested tax abatement assistance. The analysis is based on our review of the project components and financials and general rationale for assistance as submitted by the developer. There are several methods available to determine if a project would proceed "but for" the assistance. An analysis comparing the rates of return with and without assistance is a common method used to analyze the "but for" test. However, in some cases, a review of the project's sources and uses of funds and operating cash flow performance is done to determine if an operating gap exists or if the project performance is not expected to meet minimum financing requirements and assist with determining that a project meets the "but for' test. If, following the review, it is determined that the project has a shortage of debt, cash, and/or equity based on the projected value of the project upon completion and net operating income available to support debt service, it can be determined that the project would not proceed "but for" the assistance. It is important to note that tax abatement does not statutorily require a "but for' analysis to determine if the project would proceed without assistance, however it must be determined that the project is in the public interest and that the benefits outweigh the costs and the City's current tax abatement policy requires this finding be made. Public Sector Advisors City of Elk River, Minnesota Stonesthrow Properties, LLC.request for Tax Abatement October 10,2014 Page 2 Background Stonesthrow Properties, LLC (the developer) and Coin-Tainer Co. LLC are owned equally by David M. Walters and Barbara J. Walters. Stonesthrow Properties, LLC is a real estate development company. Coin-Tainer Co., LLC is a coin, currency, and raffle ticket roll manufacturer and wholesale/retail distributor. The developer has proposed to purchase the commercial property located at 17834 Industrial Circle NW, which is currently occupied by Coin-Tainer Co., LLC and four other manufacturing firms. According to the developer, Coin-Tainer Co., LLC currently occupies 50%of the approximately 50,585 square feet of the net rentable area within the building. Developer Request for Tax Abatement Assistance The developer submitted a request for tax abatement assistance from the City of Elk River and Sherburne County to assist with financing the proposed $2.6 Million acquisition of the commercial property currently being leased by Coin- Tainer Co. LLC and four other firms. The developer has requested approximately $359,580 (according to the provided supplements to the application) in abatement assistance over 10 years or the maximum available amount (under the City's abatement policy), whichever is greater, to aid in acquisition of the property. We have assumed (based upon the application materials)that the developer will fund approximately 92% ($2,400,000)of the acquisition upfront through a Contract for Deed. A Contract for Deed is an alternative financing method in which the purchase of property is financed by the seller instead of a third party lender. These types of instruments are typically utilized when a buyer would not otherwise qualify for conventional financing. Based on the provided information in the application and additional back-up information from the applicant, it appears the financial assistance requested from the City would be provided in annual installments to reduce the debt service impact created by the Contract for Deed and SBA financing at the conclusion of the Contract for Deed. Sources of Funds The Developer's submittal includes a preliminary total project budget of $2,600,000, with approximately 92% ($2,400,000) of that amount proposed to be from a Contract for Deed and approximately 8% as a down payment ($200,000)which we have assumed will be comprised of some type of private equity. Please see the table below. Project Costs Total Cost Sources of Funds Total Sources Property Acquisition $2,600,000 Private Equity (assumed) $200,000 —Down payment Contract For Deed $2,400,000 Total Costs $2,600,000 Total Sources $2,600,000 The Contract for Deed terms, as illustrated in the supplements to the developer's application,will be for a term of five years (amortized over 25)at an interest rate of 5.5%. The agreement is contingent upon the receipt of tax abatement from the City of Elk River and Sherburne County and the receipt of a microloan from the City of Elk River. City of Elk River, Minnesota Stonesthrow Properties, LLC.request for Tax Abatement October 10,2014 Page 3 Tax Abatement Analysis In order to estimate the amount of tax abatement revenues generated by the proposed development, certain assumptions were made based on the value of the project, construction schedule, and anticipated financing terms. • City of Elk River proposed tax abatement • Abate existing land and building value: • PID: 75-659-0110 • EMV as of Jan. 2, 2015 for taxes payable 2016 is$2,234,500 ■ Updated value estimate provided by Sherburne County • Sherburne County proposed tax abatement • Abate incremental building value • P I D: 75-659-0110 • EMV as of Jan. 2, 2015 for taxes payable 2016 is$2,234,500 • EMV as of Jan. 2, 2014 for taxes payable 2015 is$1,743,400 • Incremental EMV for abatement is$500,000 • Estimated Market value at Completion o According to the County(Dan Weber)the Estimated Market value of the completed building will be $2,234,500 for taxes payable 2016 • Abatement term and participation • City: 12 years of total value or • City: 15 years of total value and County 12 years: Incremental value • First Year of Abatement o Assume estimated values assessed in January of 2015 for taxes payable in 2016 • 2014 tax rates remain constant through term (Rates Provided by Sherburne County) • City: 48.544% • County: 54.861% • School: 51.286% • Other: 4.987% • Total 159.678% • Class rates remain constant through abatement term • Fiscal disparities contribution -NA • 1%annual market value inflator assumed • Present Value Assumptions 0 4% Discount Rate o Dated Date of December 31, 2014 City of Elk River, Minnesota Stonesthrow Properties, LLC.request for Tax Abatement October 10,2014 Page 4 Tax Abatement Revenue Estimates Stonesthrow Properties, LLC. 12 Year City and 15 Year City and Abatement Project 12 Year County 12 Year Count City Share of Revenues $270,769 $343,750 County Share of Revenues $65,832 $65,832 School District Share of Revenues $0 $0 Estimated Total Revenue $336,601 $409,582 Estimated Present Value of Total Revenues $252,168 $292,702 The above table illustrates the projected net revenues that tax abatement would generate for the proposed terms. The maximum abatement, based on the assumptions outlined above is projected to generate$270,769 with City only participation for 12 years, $336,601 with City and County participation for 12 years, $343,750 with City only participation for 15 years and $409,582 with City participation for 15 years and County participation for 12 years. All participation levels and amounts would be subject to individual policy and Board decisions following anticipated public hearings. Revenues captured through tax abatement and provided as reimbursement to the property owner for certain costs must be used only for those properties that benefit from the tax abatement. Abatement Assistance Scenarios The Developer's submittal included a 10 year operating pro forma beginning in 2015. The pro forma illustrates the developers projected revenues and costs associated with operating the commercial property. In the tables below we have illustrated the effect that abatement assistance will have on the pro forma. (Please note:we have amended the developers pro forma to include a 1% inflation factor on net operating income. In addition we have replaced the abatement assumptions with the maximum projected abatement revenues presented in Scenario 3 from the above Abatement Revenue table.) Scenario 1: Pro Forma Without Assistance: Year Abatement Net Cash Flow Debt Service Coverage Ratio 2015 $0 ($21,988) 0.88 2016 $0 $20,439 0.88 2017 $0 $18,875 0.89 2018 $0 $17,295 0.90 2019 $0 $15,700 0.91 2020 $0 $27,134 0.86 2021 $0 $25,506 0.87 2022 $0 ($23,862) 0.87 2023 $0 ($22,202) 0.88 2024 $0 ($20,525) 0.89 City of Elk River, Minnesota Stonesthrow Properties, LLC.request for Tax Abatement October 10,2014 Page 5 Scenario 2: Pro Forma with Estimated Abatement Revenue Assuming 12 year City/County Participation: Year Abatement Net Cash Flow Debt Service Coverage Ratio 2015 $26,816 $4,828 1.03 2016 $27,033 $6,594 1.04 2017 $27,252 $8,377 1.05 2018 $27,474 $10,178 1.06 2019 $27,697 $11,997 1.07 2020 $27,923 $789 1.00 2021 $28,151 $2,644 1.01 2022 $28,381 $4,519 1.02 2023 $28,614 $6,412 1.03 2024 $28,849 $8,324 1.04 The purpose of providing the abatement scenarios outlined above is to illustrate the developer's projected need for tax abatement assistance to provide sufficient annual cash flow to support the projected debt service payments for the project. The two scenarios outlined above illustrates that a gap in projected annual cash flow and debt service coverage exists (as the project is currently structured) and that annual tax abatement assistance will aid in reducing that gap. Developer Proforma"But For"Analysis In approving an abatement project, the Elk River EDA has requested that a finding be made that the proposed development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. The two scenarios outlined above illustrate that a cash flow and debt service coverage gap exists for the project as currently presented by the developer. The gap would have to be filled through an increase in lease rates (to produce higher revenues), a reduction in operating and/or borrowing costs, additional operating revenues including financial (abatement) assistance, or some combination of one or more of the described gap- fillers, or the project would be unlikely to proceed. The developer has also indicated that without tax abatement assistance it would not be able to acquire the property and relocate to the City of Elk River. Based on this analysis, the EDA could be justified in determining that the project meets the "but for' test and would not proceed without assistance. Tax abatement does not statutorily require a "but for" analysis to determine if the project would proceed without assistance. A city, county or school district may grant a tax abatement, by contract or otherwise, of the taxes imposed by the city on a parcel of property, which may include personal property and machinery, or defer the payments of the taxes and abate the interest and penalty that otherwise would apply, if: • it expects the benefits to the city of the proposed abatement agreement to at least equal the costs to the city of the proposed agreement or intends the abatement to phase-in a property tax increase, as provided in clause(2)(vii); and • it finds that doing so is in the public interest because it will: • increase or preserve tax base; • provide employment opportunities in the political subdivision; City of Elk River, Minnesota Stonesthrow Properties, LLC.request for Tax Abatement October 10,2014 Page 6 • provide or help acquire or construct public facilities; • help redevelop or renew blighted areas; • help provide access to services for residents of the political subdivision; • finance or provide public infrastructure; • phase-in a property tax increase on the parcel resulting from an increase of 50 percent or more in one year on the estimated market value of the parcel, other than increase attributable to improvement of the parcel; or • stabilize the tax base through equalization of property tax revenues for a specified period of time with respect to a taxpayer whose real and personal property is subject to valuation under Minnesota Rules, chapter 8100. It is also important to note that the developer has indicated that should the property be acquired and subsequently leased to Coin-Tainer Co., LLC, the project would create a minimum of 10 new full time positions and retain 26 positions in the city of Elk River. In addition upon acquisition of the property (by Stonesthrow Properties, LLC), the developer will implement improvements that are projected to increase the value of the property. The developer has indicated that without abatement revenues that acquisition and subsequent improvement of the property will not be possible due to the inability to produce viable cash flows and maintain a reasonable debt service coverage ratio. The implication being that"but for" abatement assistance the project will not proceed. Conclusion The developer has requested assistance in the amount of$359,580, or the maximum available pursuant to the City of Elk River and Sherburne County's tax abatement policy. The developer has indicated that acquisition of the property would be prohibitively expensive and not feasible without assistance as demonstrated by a debt service coverage ratio that is below market and projected negative annual cash flow. There are several methods to determine if a project would proceed "but for" assistance. Based on the available information, in this case a debt service and project cash flow gap analysis was utilized to test the viability of the project. The tables in the above paragraphs indicate that a gap in project cash flows exist and that "but for" abatement assistance, a reduction in operating and/or borrowing costs, or increased revenues (through increased lease rates to tenants or financial assistance) or some combination of the above, the project would not go forward. In addition, it is important to note that the developer has indicated that the project will aid in the retention of 26 full time jobs and the additional creation of a minimum of 10 new full time jobs (through the retention of Coin-Tainer Co., LLC as a lessee) in the City of Elk River. Thank you for the opportunity to be of assistance to the City of Elk River. Please contact us at 651-223-3000 or mhuot(@springsted.com and 0bradshaw(@springsted.com with any questions or to discuss. X. TAX ABATEMENT APPLICATION REVIEW WORKSHEET: Stonesthrow Properties, LLC TO BE COMPLETED BY CITY STAFF 1. The project meets the criteria set forth in Section V of the Tax Abatement policy. X a) Meets at least one of the objectives in Section III. X b) Demonstrates need for Tax Abatement with the but for analysis. X c) Consistent with all city plans and ordinances. X d) Serves at least two public purposes as defined in Section V (g). 2. Ratio of Private to All Public Investment in Project: Points: 5 $2,263,399 Private Investment 5:1 5 $336,601 Public Investment 4:1 4 7:1 Ratio Private: Public Financing 3:1 3 2:1 2 Less than 2:1 1 3.job Creation in the City of Elk River: Points: 5 10 Number of new jobs as a result of the project. 25+ 5 26 Number of existing/retained jobs 20+ 4 36 Total 15+ 3 10+ 2 Less than 10 1 4. Ratio of Public Investment to job Creation: Points: 4 $336,601 Public Investment $8,000 or less 5 36 Number of new jobs created/retained $10,000 or less 4 $9,350 of Public Investment per new job $12,000 or less 3 $15,000 or less 2 Over $15,000 1 5. Wage Level of new jobs created/retained Points: 3 Minimum hourly wage Over$21/ hour 5 of As created/retained: $15 $18-21 / hour 4 $14-17 / hour 3 $10-13 / hour 2 Under$10 / hour 1 6. Project size: Points: 0 The project will result in the construction 40,000+ 5 of square feet 0 30,000+ 4 20,000+ 3 10,000+ 2 10,000 or less 1 7. Market Value/Tax Base Generation: Points: 0 The project will result in a per square foot Industrial Commercial estimated market value(land and building) $80/sf+ $110/sf+ 5 of $491,100/50,340 SF: $9.75/SF $70/sf+ $100/sf+ 4 $60/sf+ $90/sf+ 3 $50/sf+ $80/sf+ 2 $40/sf+ $70/sf+ 1 8. Type of Project: Points: 4 100% Owner Occupied 5 X Mix Owner Occupied& Investment 4 Investment Property 3 9. Use: Points: 5 X Industrial or Business Park Project 5 Commercial Rehabilitation/Redevelopment 4 10. Likelihood that the project will result in Points: 1 unsubsidized, spin-off development. High 5 Moderate 3 X Low 1 Sub - Total Points: 27 of a possible 45 points. 11. Bonus Points Bonus Points: 3 X The project will be 100%Pay-as-you-go Tax Abatement 3 points The project contributes to the goals of Energy City. 2 points • Product promotes sensible use of energy, OR • Project utilizes significant energy efficient design&/or materials in construction. Total Points: 30 Overall project desirability: High 45-38 points Moderate 37-29 points Low 28-20 points Not Eligible 19-0 points P B w E A E B B T City of Elk River Tax Abatement Policy&Application �� � Amended February 2014 Page 2 of 2 ELK RIVER ECONOMIC DEVELOPMENT MICROLOAN FUND APPLICATION 1. CONTACT INFORMATION Legal Name of Business: t s - " Project Site Address: I �o e City / State / Zip IS Contact Persons) " Business Phone (ell — Fax 7-IM Q Home Phone °' Email d A( "T E Check One: Proprietor Corporation Partnership Social Security No. — �- Federal ID # State ID # 3 2. NATURE OF LOAN REQUEST Which Micr Loan Program are you applying for? Industrial Incentive Program Downtown Revitalization Financing Program Energy Efficiency Improvement Program Amount Requested: $�2 00, 000 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 10 of 17 P © NERE0 ® E Please give a brief summary of your business and its products or service: Please give a brief summary of the project: a r Please describe how this loan will impact your project: t r a 3. 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 11 of 17 I 0 N f 8 E 0 8 1 INATU 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 11 C'1_' $ d� ,o(00 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 12 of 17 P0wERE0 0 F Value of Collateral Book Value Cost Existing Liens Land $ $ $ Buildings $ $ $ Machinery&Equip. $ $ $ Other $ $ $ Other $ $ $ 4. JOB & WAGE GOALS Present# of Employees Total Payroll Oft__ CV 14 Jobs To Be Created* Please provid.e the foll information on jobs you ex ect to create Within 2-years. Average Are the Jobs Expected Number Hourly Annual Permanent or Hiring Job Title of jobs Wage Salary Tem ora ? Date u� Vic fVA 0�" --It) 14 . *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 13 of 17 E�N" A" T"U'Rfl' . PROJECT CONTACTS Attorney 1 Name Jb f Ot Address �jQ 1" 5�-• k�I e ;j!p . q Phone Accountant Name Address V 3 V e% 0 5 to%� sW yr w4 Phone �S` 1 — 1034— 9'7�f Ot 316 Financing Sources (lenders,.Partners, etc... Name Address Phone Name Address Phone Parent Company Name Address Phone Others Name Address Phone Name Address Phone Page 14 of 17 P O E B € 0 INATURB Y 6. 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 Letter of Commitment from Applicant Pled to Complete � Pp �g P 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 7. 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 c i DATE Page 15 of 17 PO ERE0 ® 1 VIII. APPLICATION FOR TAX ABATEMENT A. APPLICANT INFORMATION Name of Corporation/Partnership -r t � L-L Address Primary Contact A o AL-rets Address 1 3 T i2J 6 &afKtQ Md. Phone -1176 Fax Email boLtg , e.I Tfef OP ICO t 9- 1,01C I- Brief description of the corporation/partnership's business,including history,principal product or service: f � � Wi t - 74 aOAJ Brief description of the proposed pro'ect: — V�`Y r c.N . d AIA 1-0 -fully QQ5;�®,, v t Lo{ Cyr ri � <,�� a 9 -o-c cwt eVV Via, -1 e Attorney Name �'► Address 30 Phone UL I- Z'1 •°► � Fax r °11 Email Accountant Name Address -( 1.3 . 5 W rv1 Z.-. . Phone 6 -5 0 3 r 7 / Fax ct SZt, Email Contractor Name Address Phone / Fax Email Engineer Name f. Address Phone Fax Email P R w E R f 8 6 Y City of Elk River Tax Abatement Policy&Application Amended February 2014 INATU Page 8 of 15 Architect Name Address Phone Fax Email . PROJECT I TI 1. The project will be: Industrial: New Construction Expansion Redevelopment/ Rehab. Office/research facility that conforms to Business Park zoning standards Commercial Redevelopment/Rehabilitation Other 2. In addition to the City of Elk River, applicant is requesting Tax Abatement from: Sherburne County X School District 728 3. The project will be:_Owner Occupied Leased Space 4. Project Address 17931 Zwo,,3bIrld Parcel Identification Number(s) -1,5- -5 ^ 00 5. Site Plan and Construction Plans Attached: Yes 14—A. No 6. Total Amount of Tax Abatement Requested: $ over years. City Portion: Annual$ Total$ MAX Fe-o- County Portion: Annual$ Total$ ISD 728 Portion: Annual$ Total 7. Current Real Estate Taxes on Project Site: $ Estimated Real Estate Taxes upon Completion: Phase I Phase 11 $ 8. Construction Start Date: Construction Completion Date: If Phased Project Year % Completed Year % Completed C. PUBLIC PURPOSE It is the policy of the City of Elk River that the use of Tax Abatement should result in a benefit to the public. Please indicate how this project will serve a public purpose. Job Creation/Retention Number of existing jobs Number of jobs created by project An Average hourly wage of jobs created/retained fA New industrial development which will result in additional private investment in the area. _Enhancement and/or diversification of the City of Elk River's economic base. The project contributes to the fulfillment of the City's Economic Development Strategic Plan. Fr0w € R € ® 81 City of Elk River Tax Abatement Policy&Application Amended February 2014 [NATURE] Page 9 of 15 _Removal of blight. _Rehabilitation of a high profile or priority site. _Significantly increase the City's tax base. D. SOURCES & USES SOURCES NAME AMOUNT Bank Loan _ $ Other Private Funds -(tA\v(K. $ -I- t �j bD .00 O Owner Cash Equity $ Fed Grant/Loan $ State Grant/Loan $ EDA Micro Loan $ Tax Abatement Q $ r ID Bonds $ TOTAL $ USES AMOUNT E Land Acquisition $ )M %0MI M Site Development $ Construction $ Machinery&Equipment $ Architectural&Engineering Fees $ Legal Fees $ Interest During Construction $ Debt Service Reserve $ Contingencies $ TOTAL $ City of Elk River Tax Abatement Policy&Application ERE0 ATURB Amended February 2014 N El Page 10 of 15 E. ADDITIONAL DOCUMENTATION AND CHECKLIST Applicants will also be required to provide the following documentation: A) Written business plan,including a description of the business, ownership/management, date established,products and services,and future plans ! B) FinanY,i Statements for Past Two Years Profit&Loss Statement Balance Sheet I—C) Current inancial Statements Profit&Loss Statement to Date Balance Sheet to Date D) Two Year Financial Projections �E) Personal financial Statements of all Major Shareholders Profit&Loss Current Tax Return �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 the Project H) Application deposit of$5,000,with any unused portion to be refunded if project does not proceed �I) Construction Plans and Itemized Project Construction Statement J) Attach the/following documentation as Exhibits Exhibit A–Corporation/Partnership Description Exhibit B–Description of Project Exhibit C–List of Shareholders/Partners Exhibit D–But-For Analysis Exhibit E–List of Prospective Lessees Exhibit F–Legal Description and PID Number(s) P ® W ERE0 6i City of Elk River Tax Abatement Police&Application Amended February 2014 INATUREI Page 11 of 15 Note: All Major shareholders will be required to sign personal guarantees and a minimum assessment agreement if up front financing of the project is required. The undersigned certifies that all information provided in this application is true and correct to the best of the undersigned's knowledge. The undersigned authorizes the City of Elk River to check credit references,verify financial and other information,and share this information with other political subdivisions as needed. The undersigned also agrees to provide any additional information as may be requested by the City after the filing of this application. Applicant Name k ate' Date 1 , SAMPLE BUT-FOR L I S WITH NO WITH TAX ABATEMENT TAX ABATEMENT SOURCES AND USES SOURCES AND USES SOURCES SOURCES Mortgage 9,600,000 8,667,000 Equity 2,400,000 2,400,000 Tax Abatement 0 933,000 TOTAL SOURCES 12,000,000 12,000,000 USES USES Land 1,500,000 1,500,000 Site Work 300,000 300,000 Soil Correction 468,000 468,000 Demolition 100,000 100,000 Relocation 65,000 65,000 Subtotal Land Costs 2,433,000 2,433,000 Construction 6,750,000 6,750,000 Finish Manufacturing 250,000 250,000 Subtotal Construction Costs 7,000,000 7,000,000 Soft Costs 350,000 350,000 Taxes 35,000 35,000 Finance Fees 850,000 850,000 Project Manager 542,000 542,000 Developer Fee 540,000 540,000 Contingency 250,000 250,000 Subtotal Soft Costs 2,567,000 2,567,000 TOTAL USES 12,000,000 12,000,000 Income Statement Income Statement Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft. Rent-Space 1 100,000 $8.00 800,000 100,000 $8.00 800,000 P 0 W E R E 9 BY City of Elk River Tax Abatement Policy&Application Amended February 2014 [NATURE] Page 12 of 15 Rent-Space 2 25,000 $8.50 212,500 25,000 $8.50 212,500 Rent-Space 3 25,000 $9.00 225,000 25,000 $9.00 225,000 Other 0 $0.00 0 0 $0.00 0 1,237,500 1,237,500 Mortgage 20 Term 1,051,646 20 Term 949,439 9.00% Interest 9.00% Interest 9,600,000 Principal 8,667,000 Principal Net Income 185,854 288,061 Total Return on Equity 7.74% 12.00% X. TAX ABATEMENT APPLICATION REVIEW ET TO BE COMPLETED Y CITY STAFF 1. The project meets the criteria set forth in Section V of the Tax Abatement policy. a) Meets at least one of the objectives in Section III. b) Demonstrates need for Tax Abatement with the but for analysis. c) Consistent with all city plans and ordinances. d) Serves at least two public purposes as defined in Section V (g). 2. Ratio of Private to All Public Investment in Project: Points: $ Private Investment 5:1 5 $ Public Investment 4:1 4 Ratio Private: Public Financing 3:1 3 2:1 2 Less than 2:1 1 3.job Creation in the City of Elk River: Points: Number of new jobs as a result of the project. 25+ 5 Number of existing/retained jobs 20+ 4 Total 15+ 3 10+ 2 Less than 10 1 4. Ratio of Public Investment to job Creation: Points: $ Public Investment $8,000 or less 5 Number of new jobs created/retained $10,000 or less 4 $ of Public Investment per newjob $12,000 or less 3 $15,000 or less 2 Over$15,000 1 5.Wage Level of newjobs created/retained Points: Minimum hourly wage Over$21/ hour 5 of jobs created/retained: $18-21 / hour 4 $14-17 / hour 3 PO ERE9 BT City of Elk River Tax Abatement Policy&Application Amended February 2014 Page 13 of 15 $10-13 / hour 2 Under$10 / hour 1 6. Project size: Points: The project will result in the construction 40,000+ 5 of square feet 30,000+ 4 20,000+ 3 10,000+ 2 10,000 or less 1 7. Market Value/Tax Base Generation: Points: The project will result in a per square foot Industrial Commercial estimated market value(land and building) $80/sf+ $110/sf+ 5 of $70/sf+ $100/sf+ 4 $60/sf+ $90/sf+ 3 $50/sf+ $80/sf+ 2 $40/sf+ $70/sf+ 1 8.Type of Project: Points: 100% Owner Occupied 5 Mix Owner Occupied&Investment 4 Investment Property 3 9. Use: Points: Industrial or Business Park Project 5 Commercial Rehabilitation/Redevelopment 4 10. Likelihood that the project will result in Points: unsubsidized, spin-off development. High 5 Moderate 3 Low 1 Sub -Total Points: of a possible 45 points. 11. Bonus Points Bonus Points: eowEnE � � r City of Elk River Tax Abatement Policy&Application Amended February 2014 NATURE] Page 14 of 15 The project will be 100%Pay-asyoitgo Tax Abatement 3 points The project contributes to the goals of Energy City. 2 points • Product promotes sensible use of energy, OR • Project utilizes significant energy efficient design&/or materials in construction. Total Points Overall project desirability: High 45-38 points Moderate 37-29 points Low 28-20 points Not Eligible 19-0 points City of Elk River Tat Abatement Policy&Application 0 N E R E I C Amended February 2014 Page 15 of 15 [NATURE- Q � 0 Y _V r � Z to W LLI W a J a a J O The COM-TaionerocO. LLC 2014 Business Plan 00 0 Y V yam. Z �o Q z G J Z o � a 0 0 The Coin-Tainer Co. LLC Table of Contents Title Page Tableof Contents...............................................................................................1 Executive Summary............................................................................................2 CompanyHistory................................................................................................3 I. Business Type.................................................................................................4 II. Company Facts...............................................................................................4 III. Products.......................................................................................................4 IV. Profitability..................................................................................................6 V. Location........................................................................................................6 VI. Operations....................................................................................................7 VII. Industry.......................................................................................................8 VIII. Market.........................................................................................................8 IX. Competition...................................................................................................9 X. Timing...........................................................................................................10 XI. Financials ....................................................................................................10 1 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC Executive Summary The Coin-Tainer Company is a coin, currency, and raffle ticket roll manufacturer and distributor with 38 years of experience in the industry. With roots as a home-based operation serving central MN, Coin-Tainer has morphed from a small town manufacturer to a retail giant and wholesale distribution supplier. Serving 95% of the North American retail market and 30% of the distribution market, Coin-Tainer serves approximately 65% of the United States' volume with their coin wrappers and ticket rolls. Over the course of Coin-Tainer's time in business, there have been many challenges that have impacted the profitability of the company including a predatory supplier relationship, an industry war, a large debt service and, most recently, a total-loss fire. Despite the circumstances, the company has overcome the challenges by staying committed to its core mission: "To manufacture, market and distribute the highest quality coin wrappers and raffle ticket rolls while encouraging the individuality, productivity and integrity of their employees and customers alike." It is this commitment to excellence that has allowed Coin-Tainer to maintain relationships with every customer after a fire wiped out all production capabilities. The company's most recent challenge has forced Coin-Tainer to consider which elements of their business make sense to continue with and what processes are valuable to their core competencies. The goal is to rebuild Coin-Tainer's business around its most profitable product categories and primary technologies. The company aims to stick to a reasonable budget for a company of comparable size while becoming increasingly profitable; the decision to rent a space in Elk River will result in less overhead costs for Coin-Tainer, this includes rent, utilities, and other fixed costs associated with the smaller footprint and a newer facility. Coin-Tainer's rebuild plan includes a timeline for bringing their core competencies to fruition within a specific timeframe. Under the current financial circumstances, it is vital for Coin-Tainer to manufacture their own product. There are three phases to the production timeline: - Phase 1: Acquire finished work-in-process product from vendors willing to do business under a non-compete license agreement. Fulfill all customer orders to pre-fire specifications, even if not at their full volume. This phase was complete on March 15tH 2014. All customers are currently receiving the same products as the offering available prior to the fire. - Phase 2: Produce their own coin-wrapper-making machines using updated technology and manufacture all coin wrappers in house. Deadline: May 15th, 2014. The company's first coin wrappers were produced in house the week of April 21 st and all coin wrappers are currently produced in house. Phase 2 is complete. - Phase 3: Have their custom-built, ticket-manufacturing equipment fully operational and produce their own raffle ticket rolls on site. Deadline: October 2014. The first ticket machine is operational on site in Elk River; it is composed of used equipment but has allowed Coin-Tainer to supply the market with ticket rolls beginning in June rather than October. The second ticket machine will deliver prior to September, completing Phase 3 well ahead of schedule. 2 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC Coin-Tainer began as a small town manufacturing company and has grown to service the world's largest customers. This feat does not come without commitment, experience, a little heartache and a big drive to be the best in the industry. Coin-Tainer takes pride in what they do as a company and how they perform as a team and it shows in their product and process. Company History In September of 1976, Dave Walters, the founder and owner of Coin-Tainer, purchased four coin-wrapper-producing machines (then called "Manchester 44s") built by two retired NASA engineers from Tennessee. The machines were set up in the basement of his home with the intention of generating a secondary income selling preformed coin wrappers. Originally, coin wrapper machines were designed for bankers to make their own coin wrappers. However, the machines were marketed too soon, before fatal engineering flaws were worked out, and the machines did not work properly. Because of the difficulty in using the unreliable machines, bankers were unable to fabricate their own wrappers. Only 110 "Manchester 44s" were sold in the US prior to the equipment distributor going out of business. For Walters, 8 months of trial and error produced somewhat satisfactory machines suitable for small scale production. Because Walters was the only one to ever effectively re-engineer his "Manchester 44s", he went to Tennessee and purchased the patents and manufacturing rights from the original inventors. Thus began a 5 year project of completely renovating the units to be faster, bigger and better at producing quality preformed coin wrappers. During this period and the years following, Walters traveled across the country to purchase the remaining 106 "Manchester 44s". Each machine was dismantled, usable parts were salvaged and stocked for future use, and the remaining, useless components were discarded. From 1976 to 1981 Coin-Tainer manufactured just 1 product- preformed coin wrappers. During this time, a second-generation machine was developed; the Coin-Tainer 144 was born. In an effort to finance the research, development and design of this new unit, it was necessary to sell several updated models to manufacturers in other geographic regions. From 1981 to 1986 Coin- Tainer continued developing the preformed wrapper market in the United States. In addition, the company added other bank-related supply items to their product line in hopes of better serving their customers in the five-state area. At the end of the first ten years, Coin-Tainer occupied a 3,000-square-foot space with only 2 or 3 employees and annual sales reported as $250,000 to $300,000. Shortly after their ten-year milestone, Coin-Tainer moved to Milaca, Minnesota, doubling their footprint to occupy a 6,000- square-foot space. The next step for Coin-Tainer was to begin re-purchasing the equipment originally sold to other manufacturers in an effort to prevent their technology and information from becoming more widespread. The product line continued to expand and include products manufactured by others. The company also pushed forward the spread of Coin-Tainer coin wrappers to markets beyond the five-state area. In the late 1980s there were ten preformed coin wrapper manufacturers in the United States. Coin-Tainer was beginning to gain national recognition as one of the best providers in the industry. 3 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC In 1988, Coin-Tainer introduced coin wrappers in a bag (wrappers packaged for resale). As banks were moving away from an all-inclusive /free service model for their customers that included free coin wrappers, there was great potential for a widespread increase in demand, and Coin-Tainer jumped at the opportunity. Bank customers that were required to roll their own coins would be interested in purchasing coin wrappers from retailers in smaller quantities. With a strategic plan in place, a major retailer took their bagged product to market, and the rest is history. Today the company supplies 95% of the North American market with over 80 varieties of packaged coin wrappers. More major distributors and end users needing large quantities on short notice purchase their wrappers from Coin-Tainer than any other supplier. More recently, the company has added raffle tickets to their product offering. Coin-Tainer also supplies 95% of the North American retail market with tickets. Both coin wrappers and ticket rolls have proven to be strong performers on the retail shelves. Since its inception in the cash handling / office supply industry, the Coin-Tainer brand has become a recognized leader in quality, innovation, and performance. Coin-Tainer is one of only a handful of remaining coin-wrapper manufacturers. I. Business Type Coin-Tainer is primarily recognized as a manufacturing company of coin- and currency-related products. The company began their quest to become a go-to-market retail service company in 2006 and have since grown to provide the world's largest retailers with product directly. Keeping pace with other manufacturing giants in the industry, Coin-Tainer offers dedicated account management teams and unprecedented flexibility in manufacturing with efficiency and the ability to meet substantial demand. These qualities have put Coin-Tainer on the vendor roster of companies whose business is most valued, such as Walmart, Target, Office Depot, etc. II. Company Facts Coin-Tainer is organized as a Limited Liability Company, connected solely to David M Walters. Operating 24 hours each weekday, Coin-Tainer is open 5 days a week. Coin-Tainer has a Business License in the State of Minnesota, where all of their business filings are recorded. The company has obtained multiple insurance policies: Business Liability, Property and Contents, Workers Compensation, Loss of Income, and an Umbrella policy. III. The Products Over the years, Coin-Tainer has become experts in producing reliable coin and currency items. Up until the fire that occurred in January 2014, Coin-Tainer directly supplied each of the following products to their customers: 4 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC - Crimped End Coin Wrappers From the original "Manchester 44" machines that produced tubular coin wrappers, Coin- Tainer has engineered a larger, faster, production machine, named the "Coin-Tainer 144". In the process the company reduced the amount of paper needed for each wrapper by 20%, created the only "easy open tab" making the product more user- friendly, and increased production beyond the capability of the traditional design by 600%. - Flat Coin Wrappers The original machines utilized to create these items operated at a speed of 150ft per minute. The machines formed and glued wrappers vertically using a water-based "Elmer's" type glue. Coin-Tainer has altered the design to form and glue vertically at a speed of 400 feet per minute. The company is now able to produce thousands of flat wrappers in packaging that is 40% smaller than the original equipment was able to produce. The change in packaging creates savings in labor, corrugated, freight, and warehousing. - Currency Bands The majority of currency band presses move freshly printed paper through dryers that "curl" the ends of the bands. Coin-Tainer has engineered a process in which printed bands lay flat in sheets to cure; this results in a perfectly-flat finished product. Additionally, the new process saves in packaging and corrugated costs and space requirements. - Currency Bands on a Roll Expanding on technology brought a new product to Coin-Tainer's offering. Currency bands on a roll reduced paper needs by 15% per item and increased the speed of production by 25% over similar items. This product is currently used by Walmart's internal accounting department nationwide. Coin-Tainer remains the only manufacturer ever capable of producing currency bands on a roll. - Raffle Ticket Rolls Twelve years ago, when asked if they could produce raffle ticket rolls, Coin-Tainer set out to not only produce a product that was already in the marketplace, but to strive to create a new, more efficient process for a higher-quality finished product. Today, thanks to time and financial investments, the company is able to produce ticket rolls 4 times faster than any other manufacturer, making them one of the only viable partners for big- box retailers. This particular equipment took 3 years to get up and running; it took 1.5 years for research, finding companies to partner with capable of designing special components, and another 1.5 years for fabrication, integration and testing. Due to the fire and current building and manufacturing circumstances, Coin-Tainer's product offering has changed: - Crimped End Coin Wrappers & Flat Coin Wrappers Because the fire decimated production capabilities for Coin-Tainer, the company now purchases coin wrappers from an external vendor under a non-compete partnership agreement. With this relationship, Coin-Tainer is able to service the same set of customers as they did pre-fire. 5 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC - Currency Bands Currency bands are also purchased through the external vendor mentioned above and drop shipped from their factory. - Currency Bands on a Roll Since Coin-Tainer was the only manufacturer capable of producing this item, there is no offering of this product post-fire. Customers who were receiving this item have agreed to temporarily switch to standard currency bands knowing the company has intentions of rebuilding this machine in the near future. - Raffle Ticket Rolls Keeping up with the demand of existing customers has proven to be difficult post-fire. To address the needed volume, Coin-Tainer has implemented multiple external vendor relationships under non-compete agreements. Coin-Tainer plans to manufacture both crimped end coin wrappers and ticket rolls while continuing to distribute flat wrappers and currency bands from their manufacturing partners for optimal profitability. IV. Profitability Pre-Fire Profitability Coin-Tainer was profitable and successful due to their high volume capacity and superior product quality. Coin-Tainer operates in a mature market place with little room for much future growth in domestic market share. With focused efforts on driving out costs and maximizing efficiencies while supplying customers directly across North America, there is a good outlook for future profitability. Post-Fire Profitability Coin-Tainer will be fully operational with 100% of all machinery and equipment in production on or before November 1 st, 2014. With the new equipment in place, a smaller footprint, and new/ better technology, Coin-Tainer's operating profitability will be greatly enhanced from the pre-fire status. V. Location Pre-Fire Location Coin-Tainer was located in Milaca, MN and expanded to end up occupying a 55,000-square-foot building in the industrial park which they rented from Dave and Barbara Walters. Post-Fire Location Until September 2014 Coin-Tainer had relocated to Elk River, MN and occupied a 23,000 square-foot rented space. The facility worked well for the packaging operation and small-scale shipping Coin-Tainer had been accommodating. However, the space was undersized and underpowered for the planned full-scale operation. 6 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC Future Plans Coin-Tainer has recently moved to occupy 4 spaces, 20,000 sq ft, of the Industrial Circle property. If the Walters are successful in purchasing the building, The Coin-Tainer operation will expand to 25,000 sq ft within this same structure— on or before March 1St, 2015. Coin-Tainer does plan to continue renting space in the Elk River Industrial Park, especially if the building is purchased by The Walters. Although this new space isn't much larger than the previous facility, the space is laid out more efficiently for their process. The Industrial Park building also has more long term potential in terms of space available. The building as a whole is much larger but has current tenants that occupy several of the suites; these occupants may choose to move elsewhere in the future, leaving more space available to The Coin-Tainer Elk River is a fast growing community with many qualified applicants and better connected to both shippers and vendors. It will be an added benefit to operate Coin-Tainer in a more connected urban area. VI. Operations Daily Operations Pre-Fire: -purchase raw materials -production schedule planning -manufacture coin wrappers, ticket rolls and other products -package products -process paperwork and communicate with customers Current: -purchase coin wrappers and ticket rolls -place order for flat coin wrappers and currency bands with vendors -packaging schedule planning -package products -process paperwork and communicate with customers Future: -purchase raw materials -production schedule planning -place orders for flat coin wrappers and currency bands with vendors -manufacture coin wrappers and ticket rolls -package products -process paperwork and communicate with customers Major Suppliers and Terms Packaging Corporation of America —60 days, $100,000 credit limit International Paper Corp. —60 days, $50,000 credit limit Cellmark Paper— 60 days, $400,000 credit limit Port Townsend Paper— 30 days, $100,000 credit limit 7 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC VII. The Industry Coin-Tainer has grown to fit the ever-changing business environment that envelops it. In 2006 the company became a direct supply vendor to Walmart, Office Depot, Office Max, and Target. More recently added to our client list are Walgreens, Dollar General, as well as other regional and national retailers. This step took a major investment in research and development, but it has changed the way Coin-Tainer does business and elevated the company to a higher status in the supply chain. Coin-Tainer is no longer just a manufacturer; they are a supply partner, a brand advisor and a strategic partner. Before the fire, Coin-Tainer was the largest manufacturer of coin and currency paper products in the world. More major distributors and end uses in need of large quantities on short notice would purchase their wrappers from Coin-Tainer than any other supplier. VIII. The Market The following criteria are important in the bank supplies market: Price For many buyers, coin wrappers and ticket rolls are commodity items; if you cannot compete on price, they will not entertain the relationship. Having engineered the equipment, Coin-Tainer has production efficiencies dialed in and is able to offer extremely competitive pricing. Quality While Coin-Tainer's products can be classified as commodity items, end-users depend on their functionality, so quality does matter. Customer complaints and returns can be costly and are not tolerated by major retail customers. Coin-Tainer is committed to quality and has focused on continually improving production processes over the last 38 year. Lead Time Being able to rapidly respond to a customer's needs is critical to maintaining the relationship. Depending on the needs of the individual customer, orders may be required to ship within 24 hours of receipt with some of the major retail customers needing large volume orders to be built to their specifications and shipped free of any errors in a matter of days. Coin-Tainer's ability to be flexible and accommodate all types of lead times helps protect their business. Ship Points Because coin wrappers are extremely expensive to ship, the number of ship points available and their location is an important consideration. Currently, Coin-Tainer faces a disadvantage in the market because there is only one ship point. To help address this, Coin-Tainer is partnering with Pap-R Products in Martinsville, Illinois and Reno, Nevada to increase the number of shipment locations from 1 to 3 by 2015. 8 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC IX. The Competition Pap-R Products As one of the few existing coin and currency manufacturers, Pap-R Products is currently Coin- Tainer's post-fire supplier of coin wrappers and currency straps. Pap-R Products is equipped to serve Coin-Tainer's customers, but has little desire to expand into the retail market due to their inexperience with handling the stringent compliance guidelines and demands of retail accounts. Items Coin-Tainer chooses to no longer manufacture post-fire will be purchased through and manufactured by Pap-R Products. N.F. String & Sons Another player in the coin and currency industry, N.F. String & Sons, has annual volumes and production capabilities that are significantly less than that of Coin-Tainer. NF String & Sons is located in Pennsylvania and also faces a severe freight disadvantage. Mini-Tube USA A new competitor at this time is Mini-Tube USA, a Swedish company who has brought their preformed nested coin wrappers to America in recent years. The product is nested utilizing automated equipment rather than hand packaging, but the wrappers are not cut to a specific length to accommodate the coins inside, which can cause problems in some automatic coin wrapping machines. The shape of Mini-Tube's coin wrappers allows nesting by denomination, which provides increased efficiencies for freight and shelf space. However, the wrappers have proven to be flimsy and unreliable. In an effort to remain the leader in high-quality coin wrappers, Coin-Tainer is designing equipment to make their nesting process more time and cost-efficient. Bank Supply Distributors Bank supply distributors, many of which are customers of Coin-Tainer, carry paper coin and currency items as a part of their extensive product offering. Because they are able to offer a comprehensive banking supply assortment, they can sometimes be viewed as an appealing vendor choice. Since many of them are customers, they usually cannot compete on price and do not choose to quote Coin-Tainer's existing business. Indiana Ticket Company Indiana Ticket Company is a capable manufacturer located in Muncie, Indiana. Originating in 1971; they are an established production facility with a desirable ship point in the Midwest. They offer custom imprint tickets, shrink wrapping, and UPC labeling with a process similar to Coin- Tainer's, but do not participate in direct"go-to-market" relationships. Indiana Ticket sells their products to distributors in the market who then resell the product to the retail market and end users. This supply chain arrangement keeps them from being price competitive with Coin- Tainer. Premier Southern Ticket One of Coin-Tainer's current external vendors set up with a non-compete on tickets is Premier Southern Ticket. Located in Cincinnati OH, Premier has the production volume capacity 9 00 0 Y V yam. 2 go Q z O O The Coin-Tainer°Co. LLC necessary to serve the retail market. In 2008 they obtained Walmart's direct sale business for raffle ticket rolls. Within months they were removed from the vendor position for their inability to supply the volume and meet the necessary quality standards. The ticket roll business was then awarded to Coin-Tainer and remains there today. Premier Southern's product offering crosses several categories and focuses less on roll tickets and more on card tickets, coat checks and transit tickets. Comparable Products Plastic wrappers are an option for rolling and storing coins, but almost exclusively used in Canada. The wrappers are reusable but also mean consumers have to keep track of them and store them when not in use. In the United States, paper wrappers have proven to be more popular. X. Timing It would have a large impact on the future of The Coin-Tainer should The Walters receive the tax abatement from the City and County of Elk River to the fullest extent possible. Due to the losses incurred post-fire, The Coin-Tainer is in need of additional support to help reestablish full operations. The Coin-Tainer operating company currently has only a short term lease in the industrial park, if the Walters were to receive the funding, they could purchase the building, resulting in a more long term and stable operating environment for the company. XI. Financials 10 ARTICLES OF ORGANIZATION OF STONESTHROW PROPERTIES,LLC The undersigned organizer(s),being a natural person(s) 18 years of age or older, in order to form a limited liability company(Company)under Minnesota Statutes, Chapter 322B, herby adopts the following Articles Of Organization: ARTICLE I The name of the Company is Stonesthrow Properties, LLC. ARTICLE II The registered office of the Company is located at 13001 Twilight Road, Onamia, Minnesota 56359. ARTICLE III The name and address of the organizer(s) of this Company is as follows: Kent R. Gustafson 508 Main Street South Sauk Centre,MN 56378 ARTICLE IV Unless dissolved earlier according to law,the duration of the Company shall be perpetual. ARTICLE V The members of the Company shall have the power to enter into a member control agreement pursuant to Minn. Stat. Sec. 322B.37, or any successor thereto. ARTICLE VI Except as may be provided in any member control agreement governing the Company, the members of the company shall have none of the cumulative voting rights described in Minn. Stat. Sec. 32213.63 or any successor thereto. 1 ARTICLE VII Except as may be provided in any member control agreement governing the Company, the members of this Company shall have none of the preemptive rights described in Minn. Stat. See. 32213.33 or any successor thereto. ARTICLE VIII 8.1 Any action required or permitted to be taken at a meeting of the Board of Governors of this Company, other than an action requiring member approval,may be taken by written action signed by the number of governors that would be required to take the same action at a meeting at which all governors are present. 8.2 Any action required of permitted to be taken at a meeting of the members may be taken by written action signed by the members who own the voting power equal to the voting power that would be required to take the same action at a meeting of the members at which all members were present. ARTICLE IX 9.1 A governor of this Company shall not be personally liable to the Company or its members for monetary damages for breach of fiduciary duty as a governor; provided,however, that this Article shall not eliminate or limit the liability of a governor to the extent provided by applicable law(i) for any breach of the governor's duty of loyalty to the Company or its members, (ii) for acts or omissions not in god faith or which involve intentional misconduct or a knowing violation of law, (iii)under section 32213.56 or 80A.23 of the Minnesota Statutes, or (iv) for any transaction from which the governor derived an improper personal benefit. If Chapter 322B of the Minnesota Statutes is hereafter amended to authorize further elimination of limitation of the liability of governors,then the liability of a governor of the limited liability company, in addition to the limitation of personal liability provided herein, shall be limited to the fullest extent permitted by Chapter 322 B of the Minnesota Statutes, as amended. 9.2 Any repeal or modification of this Article by the members of the limited liability company shall be prospective only and shall not adversely affect any limitation on the personal liability of a governor of the limited liability company exist in at the time of such repeal or modification. 2 f IN WITNESS WHEREOF, I have hereunto set my hand this 156 day of July, 2014. Kent R. Gustafson, Organize' 3 i i Office of the Minnesota Secretary of State Minnesota Limited Liability Company/Articles of Organization F�°��•E�U"°" ' ' Minnesota Statutes 322B The individual(s)listed below who is (are each) 18 years of age or older, hereby adopt(s)the following Articles of Organization: ARTICLE 1 -LIMITED LIABILITY COMPANY NAME: Stonesthrow Properties LLC ARTICLE 2 - REGISTERED OFFICE and AGENT: Name Address: 13001 Twilight Road Onamia MN 56359 USA ARTICLE 3 -DURATION: PERPETUAL ARTICLE 4- ORGANIZERS: Name: Address: Kent Gustafson 508 Main Street South Sauk Centre MN 56378 USA If you submit an attachment, it will be incorporated into this document. If the attachment conflicts with the information specifically set forth in this document,this document supersedes the data referenced in the attachment. By typing my name,1, the undersigned,certify that 1 am signing this document as the person whose signature is required,or as agent of the person(s)whose signature would be required who has authorized me to sign this document on his/her behalf,or in bath capacities. 1 further certify that l have completed all required fields,and that the information in this document is true and correct and in compliance with the applicable chapter of Minnesota Statutes. l understand that by signing this document l am subject to the penalties of perjury as set forth in Section 609.48 as if i had signed this document under oath. SIGNED BY: Kent R Gustafson MAILING ADDRESS: PO Box 55 Milaca MN 56353 EMAIL FOR OFFICIAL NOTICES: kent @safeshieldIIc.com titS}[fID iIII]i7lfP1 i � �pu�eay.0 Work Item 769847600023 Original File Number 769847600023 STATE OF MINNESOTA OFFICE OF THE SECRETARY OF STATE FILED 071151201411:59 PM Mark Ritchie Secretary of State i s I i Office of the Minnesota Secretary of State Certificate of Organization I, Mark Ritchie, Secretary of State of Minnesota, do certify that: The following business entity has duly complied with the relevant provisions of Minnesota Statutes listed below, and is formed or authorized to do business in Minnesota on and after this date with all the powers, rights and privileges, and subject to the limitations,duties and restrictions, set forth in that chapter. The business entity is now legally registered under the laws of Minnesota. Name: Stonesthrow Properties LLC File Number: 769847600023 Minnesota Statutes, Chapter: 322E This certificate has been issued on: 07/15/2014 off,... ... �•',O 1ILE°U`FOR %(�¢ '•.4 Mark Ritchie Secretary of State State of Minnesota Z858Ar �D/„TDC DEPARTMENT OF THE TREASURY dpq�IRS INTERNAL REVENUE SERVICE CINCINNATI OH 45999-0023 Date of this notice: 07-16-2014 Employer Identification Number: 47-1349518 Form: SS-4 Number of this notice: CP 575 B STONESTHROW PROPERTIES LLC DAVID WALTERS MBR 13001 TWILIGHT RD For assistance you may call us at: ONAMIA, MN 56359 1-800-829-4933 IF YOU WRITE, ATTACH THE STUB AT THE END OF THIS NOTICE. WE ASSIGNED YOU AN EMPLOYER IDENTIFICATION NUMBER Thank you for applying for an Employer Identification Number (EIN) . We assigned you EIN 47-1349518. This EIN will identify you, your business accounts, tax returns, and documents, even if you have no employees. Please keep this notice in your permanent records. When filing tax documents, payments, and related correspondence, it is very important that you use your EIN and complete name and address exactly as shown above. Any variation may cause a delay in processing, result in incorrect information in your account, or even cause you to be assigned more than one EIN. If the information is not correct as shown above, please make the correction using the attached tear off stub and return it to us. Based on the information received from you or your representative, you must file the following form(s) by the date(s) shown. Form 1065 04/15/2015 If you have questions about the form(s) or the due date(s) shown, you can call us at the phone number or write to us at the address shown at the top of this notice. If you need help in determining your annual accounting period (tax year) , see Publication 538, Accounting Periods and Methods. We assigned you a tax classification based on information obtained from you or your representative. It is not a legal determination of your tax classification, and is not binding on the IRS. If you want a legal determination of your tax classification, you may request a private letter ruling from the IRS under the guidelines in Revenue Procedure 2004-1, 2004-1 I.R.B. 1 (or superseding Revenue Procedure for the year at issue) . Note: Certain tax classification elections can be requested by filing Form 8832, Entity Classification Election. See Form 8832 and its instructions for additional information. A limited liability company (LLC) may file Form 8832, Entity Classification Election, and elect to be classified as an association taxable as a corporation. If the LLC is eligible to be treated as a corporation that meets certain tests and it will be electing S corporation status, it must timely file Form 2553, Election by a Small Business Corporation. The LLC will be treated as a corporation as of the effective date of the S corporation election and does not need to file Form 8832. To obtain tax forms and publications, including those referenced in this notice, visit our Web site at www.irs.gov. If you do not have access to the Internet, call 1-800-829-3676 (TTY/TDD 1-800-829-4059) or visit your local IRS office. (IRS USE ONLY) 575B 07-16-2014 STON B 9999999999 SS-4 IMPORTANT REMINDERS: • Keep a copy of this notice in your permanent records. This notice is issued only one time and the IRS will not be able to generate a duplicate copy for you. You may give a copy of this document to anyone asking for proof of your EIN. • Use this EIN and your name exactly as they appear at the top of this notice on all your federal tax forms. • Refer to this EIN on your tax-related correspondence and documents. If you have questions about your EIN, you can call us at the phone number or write to us at the address shown at the top of this notice. If you write, please tear off the stub at the bottom of this notice and send it along with your letter. If you do not need to write us, do not complete and return the stub. Your name control associated with this EIN is STON. You will need to provide this information, along with your EIN, if you file your returns electronically. Thank you for your cooperation. Keep this part for your records. CP 575 B (Rev. 7-2007) ---------------------------------------------------------------------------------------------- Return this part with any correspondence so we may identify your account. Please CP 575 B correct any errors in your name or address. 9999999999 Your Telephone Number Best Time to Call DATE OF THIS NOTICE: 07-16-2014 ( ) - EMPLOYER IDENTIFICATION NUMBER: 47-1349518 FORM: SS-4 NOBOD INTERNAL REVENUE SERVICE STONESTHROW PROPERTIES LLC CINCINNATI OH 45999-0023 DAVID WALTERS MBR 13001 TWILIGHT RD ONAMIA, MN 56359 STONESTHROW PROPERTIES, LLC WRITTEN ACTION IN LIEU OF ORGANIZATIONAL MEETING BY THE ORGANIZER AND BOARD OF GOVERNORS The undersigned, being the organizer and first Board of Governors of Stonesthrow Properties, LLC, a Minnesota limited liability company (the"Company"), subject to Chapter 322B of the Minnesota Statutes, do hereby adopt in writing the following resolutions: WHEREAS, a copy of the Articles of Organization were presented, having been filed in the office of the Secretary of State, State of Minnesota, on July 15, 2014; therefore be it RESOLVED, that the Articles of Organization as presented be,and they hereby are, accepted and approved and that said Articles of Organization, along with the Certificate of Organization, be inserted into the official minute book of the Company. FURTHER RESOLVED, that in compliance with Chapter 322E of the Minnesota Statutes, this Company shall keep at its principal executive office the original or copies of all required records. WHEREAS, the Board of Governors have reviewed the proposed Operating Agreement of the Company and have found it to be satisfactory; therefore be it RESOLVED, that the form of Operating Agreement of the Company, as presented, be approved and adopted in its entirety and that the Secretary of the Company is hereby instructed to cause the same to be inserted into the official minute book of the Company. FURTHER RESOLVED, that the Company shall have no seat. WHEREAS,the Company shall be governed by a Board of Governors; therefore be it RESOLVED, that the following named persons are hereby elected Governors of the Company to hold such position until their successors shall have been elected and qualified or until their earlier resignation: David M. Walters - Governor Barbara J. Walters - Governor AND WHEREAS, the Board of Governors shall elect officers to serve at the discretion of the Board; therefore be it RESOLVED, that the following named persons are hereby elected to the offices of this Company set forth opposite their respective names below: David M. Walters - Chief Executive Manager/President David M. Walters - Chief Financial Manager/Treasurer Barbara J. Walters - Vice President/Secretary FURTHER RESOLVED, that the Contribution Agreements dated July 15, 2014, wherein David M. Walters and Barbara J. Walters, respectively, have each offered to pay to the Company the amounts specified below in exchange for the membership interest in the Company as set forth below, are hereby accepted by the Company: Member Name Contribution Membership Interest % Interest Voting Interest David M. Walters $500.00 50% 50% 50% Barbara J. Walters $500.00 50% 50% 50% FURTHER RESOLVED, that a statement of such contributions be prepared and retained among the Company's Required Records in accordance with Section 3226,373, Subd. 1, clause (11), of the Minnesota Statutes. WHEREAS,the Company shall require a business bank account; therefore be it RESOLVED, that the Company shall open a business bank account and that I`National Bank of Milaca shall be designated as the official depository of the Company. FURTHER RESOLVED, that the following officers shall be authorized signatories for all bank accounts of the Company: David M. Walters - Chief Executive Manager/President Barbara J. Walters - Vice President/Secretary WHEREAS, the Company shall keep financial and tax records; therefore be it RESOLVED, that the Company shall keep its financial and tax records on the basis of a calendar year ending December 31. WHEREAS, the organizer(s)of the Company desires to resign as organizer(s) and turn all rights and responsibilities over to the duly elected Board of Governors; therefore be it RESOLVED, that the written resignation of the organizer(s)of the Company is attached hereto, and is hereby accepted and effective as of the completion of the business of the organizational meeting, and thereafter the remaining governors shall govern the business of the Company. The action contained herein shall be effective as of July 15, 2014. �� /Y. 1 C?Wal,4� Kent R. Gustafson, Sole Organizer David M. Walters,Gov r Barbara J. Walt s, Governor The r r City of Elk River Economic Development Division 13065 Orono Parkway Elk River MN 55330 September 2014 Exhibit B—Description of Project Purchase of that certain office/warehouse building containing approximately 50,585 square feet of net rentable area located upon the Premises and commonly described as 17834 Industrial Circle NW, Elk River, MN. v o � 0 The Coin-Tainer CO.ttc Generations of Innovation P.O.Sox 55 1Milaca,MN 563531p(320)983-2596 f(320)983-2087/www.coin-tainer.com f I City of Elk River Economic Development Division 13065 Orono Parkway Elk River MN 55330 September 2014 EXHIBIT C-List of Shareholders/Partners Stonesthrow Properties, LLC 1. David M Walters—50% 2. Barbara J Walters—50% -Z c a z 0 0 The Coin-Tainer Co.LLC Generations oflnnovation P0.Box 551 Milaccr,MN 563531 p(320)983-2596 f(320)983-20871 www.c©in-tainer.coM x X 7 O of p W H z W W Y O N pl U z �c oo � MM � oM p M aC+ � --------- - 00 00 00 00 00 00 00 M N i � U � � L a N C O za CO W --------- - -- - --- o CE z ra _ CO O CO F CO .a zaaao°ca ° c o"o cc ¢ C4 CG F m MMMaMC�iM m o � v CO O W C � � C ' � � O a a r M 3 m ry N F F Fa L) L) c O O r rW� � F V 000006' OFF Y E >, � z v F r r cC vS wF, CC m a >CO � U �Tl z z z F-IL) a z w CE J Q U CE W O U a a m a CL` x (D O h O h O h O co C, x M m h m m O m h h(D CO M CO a u O C] N a O N N N a C]a 1n-e 1n O m r � W ffl ffl ffl ffl ffl ffl ffl ffl ffl ffl ffl fR fR fR H Z <D O h O h O h m co In g N W M m h m m O m h h<D CO co CO 64 1114 1114 1114 1114 1114 1114 1114 1114 1114 1114 Q�l Q�l .1 N N N ' 1n M O G Y p N O1 M N a O N N N a h a 1n� 1n p r � U (D O h O h O h O �In - N W M m h m m O m h h<D CO M CO z N ' 7 L N O N 7 L N N 1n M O u-, N 7 C]7 In 1n O Q U 64 64 64 64 64 64 64 64 64 64 64 64 64 64 <D O—h O h O-�--h m m U M m h m m 0 m h h<D CO M N ' 7 L N O N 7 L N N ' t M O Lr)Lo N t O] t In-e 1n O N n m h co M 64 64 64 64 64 64 64 64 64 64 64 64 64 64 64 (D O h O h O h m co In " M m h m m 0 m h h<D CO M N ' 7 u')N O N 7 u')N N 1n M O o M N 7 0 L L N 7 M 7 t co 2 O N O m h N N M h N O M Z W 64 64 64 64 64 64 64 64 64 64 64 64 64 64 fR (D O O h O r h m iz:�, co co M m h m m m 0 m h h(D N CO 7 N N N N O1 6 G CL l N N W C C 64 64 64 64 64 64 64 64 64 64 64 64 6. J W Q cD oar- &r- co Z Z Q M mr-mmOmr- r-ID N co co 0 m N ' 7 LQ N O N 7 LQ N N N O1 G (n Q o Q O M N 7 0 Lr)Lr)N t M 7 'D h W Z o a m N M M W Z x O O} O Z V rC O N IL Q Q W 64 64 64 64 64 64 64 64 64 64 64 64 fR a ~ Z R ID o r- Or- o��m � m co p Z LL Y = M m�mmOmr- r-cD N co co J co ' 7 LQ N O N 7 LQ N N N O1 G (n w M m N t N O N]N N t M N (D j N L) M M Q O N} v u) Z � Q Q cc J 64 64 64 64 64 64 64 64 64 64 64 64 64 64 fR 0 W LL cc O O r—m O h O r-h m 1� co co M m L m m 0 m h h(D N CO CO CL N N ' 7 N N O N 7 N N N N O1 O o m N 7 0 N N N 7 C]7 (D N m h N N m h N h N O J LL 64 64 64 64 64 64 64 64 64 64 64 64 64 64 fR iz:�, m co Q a M 'D Lr) co co N N ' ' c7 O O] N 7 0 u)u)N 7 m t <D U N m h N N M h N N h N Z f N } Z W OC W 64 64 64 64 64 64 64 64 64 64 64 64 64 64 64 N O O CO O N t 1n M O CO O 64 64 U 000 J J O O O Cc Cc Q O O O O W O M M W Q r N Q O w 64 64 QR LL ao ao J ULu ° `o''° w Q p ui ui c¢ N C N N f6 N N 81 U Z E E o co x y OC o 2w U Q QN a> E U w 3 U 0 cl o V N J Oc O w O N N m Q d co s Z a O O H J W J J J Z 0 m N m Z m N IL x (D CO O N O N O h h �1n O x M w O h u)O(D O r h N CO N O a N O1 a N N O h a N N N 1n M O1 (D N N t (")O In O N O M h N N M N h N O CO O O r � W 64 64 64 64 64 64 64 64 64 64 64 64 64 fR H Z (D CO O N O N O h h co 1n -e O W M W O h LR O'D m r -N CO N O u N m a u)N O h a u)N N ' 1n Cl CD Y p N O1 M 1n N a(D N N a M O In- p O CM h co N M N h O O N 64 64 6464 6464 64 64 64 64 64 64 64 64 r � U (D CO O N O N O h h co 1n " O W M w O h N 0(D O r h N - N O z N c7 a uN N O h a uN N N 1n M O1 ¢ u N (")1n N a(D N N a(")O t) H p N CO O M 1 co co U 64 64 64 64 64 64 6464 6464 64 64 64 (D w O—N O N O�h h e U -e O M w O h lf)O(D O r h N co— N O N c7 a uN N O h a uN N N ' 1n m 1 u (")w N t(D N N a C)O In-e Cl)h co co M('N')1 co O O 64 64 64 64 64 64 64 64 64 64 64 64 64 64 64 (D CO O N O N O h h co 1n " O M w O h lf)O(D O r h N CO N O N O1 a uN N O h a uN N N ' 1n Cl CD o M 1n N a(D N N a M O In- O N O O Cl)h co N M N h O O Z64 64 64 64 64 64 64 64 64 64 64 64 64 64 64 W O co O—Lo O Lo O h h 1� O co M In O h to O(D O r h N N h O N O1 a uN N O h a uN N N N O1 1 w N a (n d O N O M h N M M O r cn Z W 64 64 64 64 64 64 64 64 64 64 64 64 64 J � J Q W (D CO O Lo O Lo O h h h O CO Z Z M In O h lf)O(D O r h N N h O 0 N CD a L)N O h a L)N N N O1 Q Q u M 16 N a(D L6 N t M O (D M u) W Z m p O M h N w M M�� °' cq 0 Z Z o[Q IL Q Q W H 64 64 64 64 64 64 64 64 64 64 64 64 64 a Z _ O O O N O N O h h h O CO 0 Z LL Y ~ Mw Oh lf)O(D Or hN N h O O W N O1 a N N O h a N N N N O1 (n u M 1n N a O N N a M O (D M (n U °C >- O M m Cl)h co co M CN)-- O r ZQ O N} v u) 2 C�C o J G 64 64 64 64 64 64 64 64 64 64 64 64 64 64 64 0 cc W W c N O O O lf)O lf)O h h 1� O co M w O h lf)O(D O r h N N h O CL �i N O1 a N N O h a N N N N O1 1 0 0 N(")1n N a(D N N a(")O (D M O O CM h N N M N h O r LL (n ffl fR ffl ffl ffl ffl ffl ffl ffl ffl ffl ffl ffl ffl fR (� y (D CO O N O N O h h 1� O co Q M In O h N 0(D O r h N N h O W N m a N N O h a N N N N O1 1 R C)In N a(D U-) N f m O (D Cl) U N O M h N N M N h N O r Z M M f N } Z W OC W 64 64 64 64 ffl ffl 64 6464 6464 64 64 64 64 N Q ■ m o o �1n O O CO O N t 1n M O CO O 64 64 U 000 J J O O O cc Q O O O O cc W O M M W Q r N Q cc x 0 H 64 64 Q LL ao ao J Uw ° `o''° w Q p ui ui ¢ (� C N f6 N N 81 x U Z E E y (� OC ° ° w°[ ° > m W NW N �U w o 0 m F o 3 U m U 2w U C N 0-0 p E W W _ � N M LL C LLJ cr co >, o n m m m_ L �Z � aOOH J W J J J Z LL �(Am Z 0 N IL` TheCoin Tainer 1 City of Elk River Economic Development Division 13065 Orono Parkway Elk River MN 55330 September 2014 EXHIBIT E-List of Prospective Lessees 1. Solar Manufacturing—Suite 1&2 2. The Coin-Tainer Company, LLC—Suites 3,4,5&7 3. Fastenai Inc.—Suite 6 4. Retail Design Services—Suites 8,9,&10 G 7i eft a °o The Coin-Tainer Co.«c Generations of innovation P.O.Box 551 Milaca,MN 563531p(320)983-2596 f(320)983--20871 www.coin-tajner.com The Coin-Tainer CO. City of Elk River Economic Development Division 13065 Orono Parkway Elk River MN 55330 September 2014 Exhibit F—Legal Description and PIDs Sherburne County, MN,Tax Parcel ID#:75-659-0110 Y A 'v 0 n The Cain-Tainer Co.t« Generation of Innovation PO.Box 55/Milaca,MN563531p(320)983-2.596 ((320)983-2087 1vnhw.coin-tainer.com .. .__._..__ . The Coin-Tainer Co. L.L.C. 214 8th Street NE Milaca, MN 56353 Balance Sheet As of December 2012 818120'14 10:24:28 AM Assets Current Assets Cash&Cash Equivalents Checking Account- New ($31,575.06) Payroll Checking Account ($8,542.58) Payroll Account-Outstanding ($10,939.08) Total Cash &Cash Equivalents ($51,056.72) Accounts Receivable Accounts Receivable $551,797.01 Total Accounts Receivable $551,797.01 Inventory Raw Materials $556,070.00 Finished Goods $147,561.99 Inventory Allocated toOverhead $308,552.00 Total Inventory $1,012,183.99 Total Current Assets $1,512,92428 Fixed Assets Equipment Equipment $1,504,863.68 Acc. Depr: Equipment ($1,454,980.62) Total Equipment $49,883.06 Manufacturing Equipment Manufacturing Equipment $5,073,958.49 Printing Plates $322,480.26 Plates/Dies at Smurfit Stone $47,820.00 Equipment Parts $133,665.00 Acc Depr: Manuf. Equipment ($3,387,497.54) Total Manufacturing Equipment $2,190,426.21 Furniture& Fixtures Furniture& Fixtures $94,450.78 Acc Depr: Furniture& Fixture ($84,562.73) Total Furniture&Fixtures $9,888.05 Office Equipment Office Equipment $22,308.02 Acc Depr: Office Equipment ($18,802.46) Total Office Equipment $3,505.56 Vehicles Vehicles $94,740.36 Acc Depr:Vehicles ($69,301.70) Total Vehicles $25,438.66 Leasehold Improvements Leasehold Improvements $874,408.55 Acc Depr. Leasehold Imp ($229,240.00) Total Leasehold Improvements $645,168.55 Total Fixed Assets $2,924,310.09 Loan Fees Loan Fees $70,356.50 Amortization: Loan Fees ($20,73024) Total Loan Fees $49,626.26 Total Assets $4,486,860.63 Liabilities Current Liabilities Accounts Payable Accounts Payable $1,188,379.11 Other Accounts Payable $23,075.35 Total Accounts Payable $1,211,454.46 Payroll Withholding Accrued Payroll $24,480.64 The Coin-Tainer Co. L.L.C. Balance Sheet As of December 2012 818/2014 10:24:2$AM FUTA Payable $183.12 SUTA Payable $3,817.00 941 Penalty Payable $31,501.22 Total Payroll Withholding $59,981.98 Other Current Liabilities Sales Tax Payable $575.00 Total Other Current Liabilities $575.00 Total Current Liabilities $1,272,011.44 Long-Term Liabilities Notes Payable NIP: 1st National#1005401-69 $152,797.60 Toyota Lease $24,909.00 NlP: 1st National Bank Milaca $2,421,467.13 NIP: 1st National Working Cap $589,938.56 Total Notes Payable $3,189,112.29 Total Long-Term Liabilities $3,189,112.29 Total Liabilities $4,461,123.73 Equity Capital Guaranteed Payments ($150,000.00) Current Year Withdrawals ($224,204.54) Capital Investment $293,436.43 Total Capital ($80,768.11) Current Year Earnings ($439,314.92) Retained Earnings $545,819.93 Total Equity $25,736.90 Total Liability&Equity $4,486,860.63 The Coin-Tainer Co. L.L.G. 214 8th Street NE Milaca, MN 56353 Profit & Loss Statement January 2012 through December 2012 818/2014 11:35:54 AM Income Bulk Sales CE Penny 20001 $323,749.85 CE Nickels 20005 $296,761.40 CE Dimes 2001 $284,900.99 CE Quarters 20025 $378,135.50 CE Dollars 20100 $27,378.10 CE$2 20200 $28,755.50 CE Asst 20300 $2,720.00 CE Halves 20050 $702.56 Flat .50 Fenny 30001 $17,506.30 .50 Penny#30001 N $19,939.60 Flat$2 Nickel 30005 $1,381.25 $2 Nickel Flat Neat#30005N $8,946.20 Flat$5 Dime 30010 $1,660.70 $5 Dime Neat#30010-N $16,905.82 Flat$10 Quarter 30025 $2,087.30 $10 QTR Neat#30025-N $23,163.58 Flat$1 Dollar 30100 $4,763.08 Flat$2 Dollar 30200 $3,07220 Brown Kraft Straps $11,146.54 Curr Band $25 400025 $10,421.45 Curr Band$50 400050 $17,056.80 Curr Band$100 400100 $54,034.65 Curr Band$200 400200 $20,974.70 Curr Band $250 400250 $3,590.35 Curr Band$500 400500 $25,912.70 Curr Band$1000 401000 $121,478-80 Curr Band $2000 402000 $110,263.00 Curr Band $5000 405000 $10,717.15 Curr Band $10000 410000 $14,110.10 Sales WRPR-ON-ROLL $1,014.60 Sales CSI Currency Rolls $69,721.85 Sales Case Paper $12,221.80 Sales MMF $10,061.32 Sales PMCO $373,006.90 Penny 8"Auto Wrap $11,988.08 Nickel 8"Auto Wrap 50005 $4,768.54 Dime 8"Auto Wrap 50010 $4,101.50 QTR 8"Auto Wrap 50025 $17,001.00 Halves 8"Auto Wrap 50050 $164.00 Dollar8°Auto Wrap 50100 $1,798.30 Penny 6"Auto Wrap 51001 $1,178.00 Nickel 6"Auto Wrap 51005 $318.00 Dime 6"Auto Wrap 51010 $382.00 QTR 6"Auto Wrap 51025 $1,365.00 Napkin Straps $24,476.00 Sales-Sortkwik Moisteners $268,296.76 Raffle Tic-Kit Sales $44,416.80 Total Bulk Sales $2,688,516.62 Retail Sales Office Depot 48ct Penny $18,205.11 Office Depot 48ct Quarter $37,381.47 Office Depot 48ct Assorted $33,620.79 48ct Off Max Penny Retai $13,528.80 48ct Off Max Qtr Retail $29,286.00 48ct Off Max Asst $32,173.20 Office Depot 150 ct Asst Fiats $14,478.98 40ct MMF Penny $14,031.36 60ct MMF Penny#60160 $22,613.76 The Coin-Tainer Co. L.L.C. Profit& Lori Statement January 2012 through December 2012 8/812014 11:35:54 AM 60ct MMF Qtr#60165 $43,564.80 60 ct MMF Asst#60170 $54,656.64 Target Retail Bags $72,440.20 Wal-Mart 100ct Penny Flat $6,196.32 Wal-Mart 100ct Asst Nested $13,871.88 WalMart 48 Penny&Qtr $2,361.25 WalMart 48 Asst $607,335.29 48ct Can Retail Bags $1,827.00 Magnif#4610 $167,931.24 Magnif#4620 $16,188.00 Kittrich Retail Bags $24,024.00 Total Retail Sales $1,225,716.09 Ticket Roll Sales Sales-Ticket Rolls $2,769,130.87 Total Ticket Roll Sales $2,769,130.87 Other Income 36ct Coin-Tainer Retail Bag $1,097,423.66 Freight Income $48,202.42 Late Fees Collected $291.59 Miscellaneous Income $59,217.26 Total Other Income $1,205,134.93 Total Income $7,888,498.51 Cost of Sales Bulk Cost of Sales Cost of Goods Sold 20001 $92,384.76 Cost of Goods Sold 20005 $89,591.75 Cost of Goods Sold 20010 $70,333.88 Cost of Goods Sold 20025 $117,194.41 Cost of Goods Sold 20100 $9,197.62 Cost of Goods Sold 20200 $10,354.42 Cost of Goods Sold 20300 $1,670.60 Cost of Goods Sold 20050 $191.27 C of G .50 Penny Flat Bulk $3,303.51 C of G .50 Penny Flat Neat $10,818.23 C of G Sold PENNY WRPR-ON-ROLL $269.35 C of G NICKEL WRPR-ON-ROLL $17.70 C of G DIME WRPR-ON-ROLL $147.86 C of G QTR WRPR-ON-ROLL $299.10 Cost of Goods Sold 30005 $495.43 C of G $2 Nickel Flat Neat $5,162.19 Cost of Goods Sold 30010 $710.93 C of G $5 Dime Flat Neat $6,370.01 Cost of Goods Sold 30025 $1,139.77 C of G $10 QTR Flat Neat $12,73528 Cost of Goods Sold 30100 $2,369.53 Cost of Goods Sold 30200 $1,089.80 C of G Sold-Br Kraft Straps $6,424.85 Cost of Goods Sold 400025 $5,058.41 Cost of Goods Sold 400050 $8,467.44 Cost of Goods Sold 400100 $26,256.62 Cost of Goods Sold 400200 $10,444.49 Cost of Goods Sold 400250 $1,722.35 Cost of Goods Sold 400500 $12,701.85 Cost of Goods Sold 401000 $62,355.71 Cost of Goods Sold 402000 $544,145.87 Cost of Goods Sold 405000 $5,236.34 Cost of Goods Sold 410000 $6,995.28 C of G Sold CSI Rolls $69,221.18 Cost of Goods Sold Misc $138,714.00 Cost of Goods Sold Case Paper $6,100.14 Cost of Goods Sold MMF $3,213.73 The Coin-Tainer Co. L.L.C. Profit & Loss Statement January 2012 through December 2012 $1$!2014 11:35:54 AM C of G Sold PMCO $164,745.47 Cost of Goods Sold Auto Wrap $23,460.87 C of Goods Napkin Straps $11,268.11 C of G Sortkwik Moisteners $239,605.52 C of G Sold Raffle Tic-Kit $29,899.68 Total Bulk Cost of Sales $1,321,885.31 Retail Cost of Sales C of G Office Depot 48ct Penny $6,614.04 C Of Goods 48ct Off Max Retail $25,780.01 C of G Office Depot 48ct QTR $13,574.62 C of G Office Depot 48ct Asst $12,146.21 C of G Office Depot Flat Asst $4,787.18 C of Goods 40ct MMF Penny $4,784.00 C of GS 60 ct MMF Penny#60160 $8,493.22 C of GS 60ct MMF Qtr#60165 $17,099.79 C of GS 60ct MMF Asst $20,089.31 C of Goods Target Retail Bags $28,753.83 C of G Walmart 100ct Penny $1,923.06 C of G Walmart 100ct Asst Nest $3,387.61 C of G 48ct Can Retail Bags $578.64 C of G Walmart 48ctPen&Qtr $810.89 C of G walmart 48ct Asst Bag $240,641.70 C of G Magnif 4610 $33,192.54 C of G Magnif#4620 $2,495.95 C of G Kittrich Bags $10,760.75 Total Retail Cost of Sales $435,913.35 Ticket Roll Cost of Sales Cost of Goods Sold-Tckt Rolls $1,569,202.74 Total Ticket Roll Cost of Sales $1,569,202.74 Building Expenses Rent $130,200.00 Repairs& Maintenance $145,482.22 Utilities $80,024.38 Depreciation Expense-CGS $387,000.68 Total Building Expenses $742,707.28 Other Costs Production Wages $696,635.74 Production Wages-OT $2,102.25 36ct CoinTainer Bag C of Sales $433,976.95 Inventory Adjustments $31,923.50 Outside Contractor Fees $200,420.33 Materials& Supplies $434,835.43 Freight $455,876.67 Other Costs $295.91 Total Other Costs $2,256,066.78 Total Cost of Sales $6,325,775,46 Gross Profit $1,562,723.05 Expenses Payroll Expense Wages $321,514.26 Employer Expenses $104,960.05 Commissions Paid $220,604.63 Bonus Wages $12,354.83 Vacation pay Expense $42,246.31 Total Payroll Expense $701,680.08 Office Expense Office Supplies $12,575.73 Dues& Subscriptions $320.17 Postage& Printing $2,641.69 Bank Service Charges $61,184.01 The Coin-Tainer Co. L.L.C. Profit & Loss Statement January 2012 through December 2012 8/6/2014 11:35:54 AM Total Office Expense $76,721.60 Utilities Gas $399.84 Electricity $58.16 Water $417.12 Rubbish Removal $670.78 Total Utilities $1,545.90 Telecommunications Telephone $16,043.04 Internet Expense $3,518.19 Total Telecommunications $19,561.23 Insurance Health Insurance $148,568.07 General Insurance $4,000.00 Workers'Comp. Insurance $60,468.04 Life Insurance $45,689.77 Total Insurance $258,725.88 Legal& Professional Services Legal& Professional Services $99,682.07 Total Legal &Professional Services $99,682.07 Freight&Shipping Expense Supplies $627.76 Total Freight&Shipping Expense $627.76 Travel&Entertainment Travel $68,191.85 Automobile Expenses $22,708.78 Total Travel &Entertainment $90,900.63 Depreciation Depreciation Expense $30,154.92 Total Depreciation $30,154.92 Amortization Amortization Expense $6,910.08 Total Amortization $6,910.08 Discounts Discounts Given $425,038.47 Discounts Taken ($18,143.89) Late Fees Paid $144.13 Total Discounts $407,038.71 Other Expenses Other Expenses $18,032.40 Total Other Expenses $18,032.40 Total Expenses $1,711,581.26 Operating Profit ($148,858.21) Other Income Other Expenses Interest Expense Interest Cxpense-1st National $241,777.49 Total Interest Expense $241,777.49 Interest Expense-Equip Leases Interest-Toyota Lease $557.49 Total Interest Expense-Equip Leases $557.49 Misc Other Expenses Loss on Sale of Assets $16,016.97 IRS Penalties $27,693.62 IRS Interest $2,093.79 MN Dept of Revenue-Interest $957.24 MN Dept of Revenue-Penalty $1,360.11 Total Misc Other Expenses $4.8,121.73 Total Other Expenses $290,456.71 Net Profit/(Loss) ($439,314.92) The Coin-Tainer Co. L.L.C. 214 8th Street NE Milaca, MN 56353 Balance Sheet As of December 2013 8/8/2014 10:24:42 AM Assets Current Assets Cash &Cash Equivalents Checking Account- New ($46,644.68) Payroll Checking Account $16,665.09 Payroll Account-Outstanding ($7,678.28) Total Cash &Cash Equivalents ($37,657.87) Accounts Receivable Accounts Receivable $517,398.75 Total Accounts Receivable $517,398.75 Inventory Raw Materials $513,031.43 Finished Goods $174,356.90 Inventory Allocated toOverhead $308,552.00 Total Inventory $995,940.33 Total Current Assets $1,475,681.21 Fixed Assets Equipment Equipment $1,504,863.68 Acc. Depr: Equipment ($1,472,334.42) Total Equipment $32,529.26 Manufacturing Equipment Manufacturing Equipment $5,073,958.49 Printing Plates $322,480.26 Plates/pies at Smurfit Stone $47,820.00 Equipment Parts $133,665.00 Acc Depr. Manuf. Equipment ($3,702,913.34) Total Manufacturing Equipment $1,875,010.41 Furniture& Fixtures Furniture& Fixtures $94,450.78 Acc Depr: Furniture&Fixture ($88,262.45) Total Furniture& Fixtures $6,188.33 Office Equipment Office Equipment $22,308.02 Acc Depr: Office Equipment ($20,133.98) Total Office Equipment $2,174.04 Vehicles Vehicles $94,740,36 Acc Depr:Vehicles ($76,164.26) Total Vehicles $18,576.10 Leasehold Improvements Leasehold Improvements $874,408.55 Acc Depr: Leasehold Imp ($251,687.92) Total Leasehold Improvements $622,720.63 Total Fixed Assets $2,557,198.77 Loan Fees Loan Fees $70,356.50 Amortization: Loan Fees ($27,640.08) Total Loan Fees $42,716.42 Total Assets $4,075,596.40 Liabilities Current Liabilities Accounts Payable Accounts Payable $1,282,95788 Total Accounts Payable $1,282,957.88 Payroll Withholding Accrued Payroll $21,459.40 FUTA Payable $135.19 The Coin-Tainer Co. L.L.C. Balance Sheet As of December 2013 818!2014 10:24:42 AM SUTA Payable $3,600.00 941 Penalty Payable $31,501.22 Total Payroll Withholding $56,695.81 Other Current Liabilities Sales Tax Payable $816.29 Total Other Current Liabilities $816.29 Total Current Liabilities $1,340,469.98 Long-Term Liabilities Notes Payable NIP: 1 st National#1005401-71 $41,014.13 Toyota Lease $19,869.51 NIP: 1st National Bank Milaca $2,280,247.87 N1P: 1st National Working Cap $485,399.71 Total Notes Payable $2,826,531.22 Total Long-Term Liabilities $2,826,531.22 Total Liabilities $4,167,001.20 Equity Capital Guaranteed Payments ($150,000.00) Current Year Withdrawals ($124,173.23) Capital Investment $225,500.00 Total Capital ($48,673.23) Current Year Earnings ($68,468.47) Retained Earnings $25,736.90 Total Equity ($91,404.80) Total Liability& Equity $4,075,596.40 The Coin-Tainer Co. L.L.C. 214 8th Street NE Milaca, MN 56353 Profit & Loss Statement 81812014 January 2013 through December 2013 11:36.43 AAA Income Bulk Sales CE Penny 20001 $317,228.48 CE Nickels 20005 $291,824.80 CE Dimes 2001 $284,549.96 CE Quarters 20025 $384,645.19 CE Dollars 20100 $31,320.10 CE$2 20200 $32,970.00 CE Asst 20300 $2,447.00 CE Halves 20050 $510.70 Flat.50 Penny 30001 $11,444.00 .50 Penny#30001 N $14,535.16 Flat$2 Nickel 30005 $541.20 $2 Nickel Flat Neat#30005N $7,652.80 Flat$5 Dime 30010 $390.00 $5 Dime Neat#30010-N $9,181.78 Flat$10 Quarter 30025 $1,485.60 $10 QTR Neat#30025-N $22,415.12 Flat$1 Dollar 30100 $3,739.10 Flat$2 Dollar 30200 $3,343.20 Brown Kraft Straps $39,746.51 Curr Band$25 400025 $22,016.10 Curr Band$50 400050 $28,891,45 Curr Band$100 400100 $64,360.49 Curr Band $200 400200 $26,366.67 Curr Band $250 400250 $3,046.89 Curr Band$500 400500 $35,487.73 Curr Band$1000 401000 $133,337.68 Curr Band $2000 402000 $128,095.91 Curr Band$5000 405000 $10,237.71 Curr Band $10000 410000 $14,458.68 Sales WRPR-ON-ROLL $1,988.75 Sales CSI Currency Rolls $132,523.66 Sales Case Paper $6,295.90 Sales MMF $5,042.87 Sales PMCO $306,597.30 Penny 8"Auto Wrap $12,093.10 Nickel 8"Auto Wrap 50005 $5,496.08 Dime 8"Auto Wrap 50010 $5,593.04 QTR 8"Auto Wrap 50025 $15,546.16 Halves 8"Auto Wrap 50050 $170.00 Misc 8"Auto Wrap 50300 $42,50 Penny 6"Auto Wrap 51001 $976.00 Nickel 6"Auto Wrap 51005 $385.50 Dime 6"Auto Wrap 51010 $419.00 QTR 6"Auto Wrap 51025 $2,079.50 Napkin Straps $27,921.00 Sales-Sortkwik Moisteners $284,313.12 Raffle Tic-Kit Sales $47,431.80 Total Bulk Sales $2,781,185.29 Retail Sales Office Depot 48ct Penny $15,839.16 Office Depot 48ct Quarter $34,759.68 Office Depot 48ct Assorted $30,656.94 48ct Off Max Penny Retai $11,664.00 48ct Off Max Qtr Retail $24,883.20 48ct Off Max Asst $25,660.80 Office Depot 150 ct Asst Flats $12,254.84 40ct MMF Penny $12,441.60 60ct MMF Penny#60160 $27,504.00 The Coin-Tainer Co, L.L.C. Profit & Loss Statement January 2013 through December 2013 81$!2014 11:36:43 AM 60ct MM F Qtr#60165 $50,352.00 60 ct MMF Asst#60170 $72,328,32 Target Retail Bags $46,056.80 Wal-Mart 100ct Penny Flat $6,998.22 Wal-Mart 1 00c Asst Nested $263,214.92 WalMart 48 Penny&Qtr $1,405.10 WalMart 48 Asst $342,317.29 48ct Can Retail Bags $4,406.40 Magnif#4610 $145,098.04 Magnif#4620 $3,296.00 Kittrich Retail Bags $23,520.00 Total Retail Sales $1,154,657.31 Ticket Roll Sales Sales-Ticket Rolls $2,749,090.41 Total Ticket Roll Sales $2,749,090.41 Other Income 36ct Coin-Tainer Retail Bag $960,127.60 Freight Income $46,329.66 Late Fees Collected $303.00 Miscellaneous Income $282,267.41 Total Other Income $1,289,027.67 Total Income $7,973,960.68 Cost of Sales Bulk Cost of Sales Cost of Goods Sold 20001 $91,895.70 Cost of Goods Sold 20005 $89,613.23 Cost of Goods Sold 20010 $69,668.58 Cost of Goods Sold 20025 $120,888.68 Cost of Goods Sold 20100 $9,918.49 Cost of Goods Sold 20200 $10,832.90 Cost of Goods Sold 20300 $1,463.14 Cost of Goods Sold 20050 $166.28 C of G .50 Penny Flat Bulk $1,502.19 C of G .50 Penny Flat Neat $6,776.67 C of G Sold PENNY WRPR-ON-ROLL $420.97 C of G NICKEL WRPR-ON-ROLL $177,89 C of G DIME WRPR-ON-ROLL $116.53 C of G QTR WRPR-ON-ROLL $607.17 Cost of Goods Sold 30005 $135.39 C of G $2 Nickel Flat Neat $3,851.75 Cost of Goods Sold 30010 $3.52 C of G$5 Dime Flat Neat $4,504.73 Cost of Goods Sold 30025 $903.93 C of G $10 QTR Flat Neat $10,943.56 Cost of Goods Sold 30100 $1,611.25 Cost of Goods Sold 30200 $1,160.59 C of G Sold-Br Kraft Straps $7,063.69 Cost of Goods Sold 400025 $10,443.38 Cost of Goods Sold 400050 $14,049.95 Cost of Goods Sold 400100 $31,269.57 Cost of Goods Sold 400200 $12,860.49 Cost of Goods Sold 400250 $1,451.98 Cost of Goods Sold 400500 $17,486.28 Cost of Goods Sold 401000 $68,036.04 Cost of Goods Sold 402000 $61,180.27 Cost of Goods Sold 405000 $4,995.19 Cost of Goods Sold 410000 $7,287.58 C of G Sold CSI Rolls $106,888.95 Cost of Goods Sold Misc $261,227.72 Cost of Goods Sold Case Paper $3,134.33 Cost of Goods Sold MMF $1,641.47 The Coin-Tainer Co. L.L.C. Profit & Loss Statement January 2013 through December 2013 8/8/2014 11:36:43 AM C of G Sold PMCO $122,815.83 Cost of Goods Sold Auto Wrap $23,997.89 C of Goods Napkin Straps $10,364.34 C of G Sortkwik Moisteners $279,152.16 C of G Sold Raffle Tic--Kit $26,991.68 Total Bulk Cost of Sales $1,499,501.93 Retail Cost of Sales C of G Office Depot 48ct Penny $4,723.99 C Of Goods 48ct Off Max Retail $20,774.11 C of G Office Depot 48ct QTR $10,545.07 C of G Office Depot 48ct Asst $9,298.72 C of G Office Depot Flat Asst $4,057.75 C of Goods 40ct MMF Penny $3,929.43 C of GS 60 ct MMF Penny 460160 $10,116.48 C of GS 60ct MMF Qtr#60165 $19,812.81 C of GS 60ct MMF Asst $26,639.48 C of Goods Target Retail Bags $20,416.85 C of G Walmart 100ct Penny $2,096.38 C of G Walmart 100ct Asst Nest $117,034.84 C of G 48ct Can Retail Bags $1,319.74 C of G Walmart 48ctPen&Qtr $515.10 C of G walmart 48ct Asst Bag $146,261.29 C of G Magnif 4610 $30,939.46 C of G Magnif#4620 $577.05 C of G Kittrich Bags $11,160.79 Total Retail Cost of Sales $440,219.34 Ticket Roll Cost of Sales Cost of Goods Sold-Tckt Rolls $1,349,212.33 Total Ticket Roll Cost of Sales $1,349,212.33 Building Expenses Rent $130,200.00 Repairs&Maintenance $190,988.41 Utilities $84,551.11 Depreciation Expense-CGS $355,217_.52 Total Building Expenses $760,957.04 Other Costs Production Wages $673,271.72 Production Wages-OT $17,034.08 36ct CoinTainer Bag C of Sales $465,688.12 Inventory Adjustments ($83,966,34) Outside Contractor Fees $328,154.02 Materials&Supplies $215,614.11 Freight $571,813.55 Other Costs $111.92 Total Other Costs $2,187,721.18 Total Cost of Sales $6,237,611.82 Gross Profit $1,736,348.86 Expenses Payroll Expense Wages $340,311.54 Employer Expenses $104,209.74 Commissions Paid $288,820.17 Bonus Wages $12,051.34 Vacation Pay Expense $40,782.93 Total Payroll Expense $786,175.72 Office Expense Office Supplies $14,024.56 Dues& Subscriptions $340.00 Postage& Printing $2,766.06 Bank Service Charges $42,437.11 The Coin-Tainer Co. L.L.C. Profit & Loss Statement January 2013 through December 2013 8/812014 11:36:43 AM Total Office Expense $59,567.73 Utilities Water $51.62 Total Utilities $51.62 Telecommunications Telephone $10,746.43 Internet Expense _ $1,589.55 Total Telecommunications $12,335.98 Advertising Advertising $106.88 Total Advertising $106.88 Insurance Health Insurance $116,592.04 Workers'Comp. Insurance $58,676.41 Life Insurance $52,899.81 Total Insurance $228,168.26 Legal &Professional Services Legal &Professional Services $120,159.35 Total Legal& Professional Services $120,159.35 Freight&Shipping Expense Supplies $500.00 Total Freight&Shipping Expense $500.00 Travel& Entertainment Travel $69,656.03 Automobile Expenses $22,678.68 Total Travel& Entertainment $92,334.71 Depreciation Depreciation Expense $11,893.80 Total Depreciation $11,893.80 Amortization Amortization Expense $6,909.84 Total Amortization $6,909.84 Discounts Discounts Given $281,853.13 Discounts Taken ($29,756.58) Late Fees'Paid $424,60 Total Discounts $252,521.15 Total Expenses $1,570,725.04 Operating Profit $165,623.82 Other income Other Expenses Interest Expense Interest Expense-1st National $222,421.74 Total Interest Expense $222,421.74 Interest Expense-Equip Leases Interest-Toyota Lease $1,670.55 Total Interest Expense-Equip Leases $1,670.55 Prinsource Fees Miscellaneous $10,000.00 Total Prinsource Fees $10,000.00 Total Other Expenses $234,092.29 Net Profit/(Loss) ($68,468.47) The Coin-Tainer f City of Elk River Economic Development Division 13065 Orono Parkway Elk River MN 55330 September 2014 Letter of Commitment from other sources of financing It is anticipated that, on or before January 1St, 2015, Coin-Tainer will enter into a Contract for Deed ("Cl)")to purchase the Building pursuant to the following terms: Purchase Price: $ 2,600,000.00 Down Payment: ($ 200,000.00) CD Amount: $ 2,400,000.00 CD Term: Five (5)years CD Interest Rate: Five &Y2 % (5.50%) CD Amortization: Twenty Five (25) years CD monthly payment: $14,738.00 CD closing date: 1/1/15 CD contingencies: 1. Receipt of"Tax Abatement" from the City of Elk River and Sherburne County in amounts satisfactory to Coin-Tainer. 2. Receipt of City of Coon Rapids Economic Development "Microloan" funds in amounts satisfactory to Coin-Tainer. 0 me Coin-Tainer Co.uc Generations oflnnovation PO.Box SSIMilaca,MN 563531p(320)983-2595 f(320)983-2087/wwrw.coin-tainer.com r) { B385 INDIVIDUAL STATEMENT (ier.3/77) 111 oewALa eueLINHINC CO,,NEW ULMi.11141. For the purpoie,of procuring credit from time to time with the bank. named below, the following is furnished is- a true and accurate statement of my condition on the date indicated. I agree to notify said b nk promptly of any Imaterial change in my financial condition. {e •j �r- NAMMaE- v ti �'—� ADDRESS_42 do f_ __f w;L�yAt T dAffM rA, rn A r 're, 3 BAS BUSINESS OF MA%Blt FINANCIAL CONDITION ON • 19 �53 ]s Dollars Cts. LI,tBILIt7ES Dollars C'ts. Cash on lieiad and fu-Bank QV Notes Pa able to Banks Notes Receivable-Secured-Good Notes Pa le to Others d a-arm lain Notga Re eivable-unae d-Good 19 170' 0 Accounts P b; - o Accoun GO Merchandise Owing to Qx n Co Farm Products Owing to Relatives ,L.L:ve--5 oe3c Chatttl Moxtaqs4bs Listed Stocks, . Other Cgrreal Assets ` (Itemize) O � Oro rordl, aUimm ASSETS S' fJ�? 00 rorAL CEWRSxr LIABILITIRS Q -Other Stggks___qnd o (See Schedule) ldort a e on Homestead First idoLt e c .' b. Mo Other Liabilities )) Life !0 1 6 i om Ht+mestead.. .__ ow 060 Other'Redl E"stdt'e (See Schedule) Hou ehold Furniture 0 machinery;' Fikttires &•Equipment ow cell Automobile dQ Tor," LIdBrLIrr83 1 ze f av �v arJ TOTAL TOTAL Specify any of the above assets pled s �.2 Mere Fles fail provision been Fade for Zncome.raxem to date of + j this Statement? �r r PROFIT LOSS From To ANNUAL INCOME Net Sales From p Less Cost of Goods Sold From Gross, Profit From Real. Ext-ate Sentals Leas: Personal"Sa1ar •3 From Investments hops Other Sources Expenses S IF s+ (Spec ty) NET PROFIT OR LOSS S TOTAL ANNUAL INCOME S Contingent Liabilities: On Guarantees: On Endorsements: On Bond o i or 0 Contingent Liability is cif I Bank, Accounts: * You-need not disclose income derived from alimony, child support or separate maintenance unless you wish.us to consider it in eval- uating your credit-worthiness,but if you do choose to rely on such Inca you must specify its source. Date Siqned Signature SCHEDULE OF ACCOUNTS', N06TES AND MORTGAGES RECEIVABLE MAKER OR PAYER SECURITY . i NT. RECO. DATE DUE AMOUNT SCHEDULE OF LIFE INSURANCE INSURANCE COMPANY @ENEFICIARY . - AMOUNT OF POLICY CASH VALUE AMOUNT C �w BORROWED SCHEDULE OF REAL ESTATE DESCRIPTION AND LOCATION TITLE IN WHOSE NAME VALUE RENTALS MORTGAGES MATURITY RECEIVED INSURANCE U, - SCHEDULE OF STOCK. BONDS AND SECURITIES x0. os SHARESr DESCRIPTION PAR VALUE MARKET YAiUE DIVIDENDS Oq TOTAL PER SHARE PER SHARE INTEREST RECSI yED MARKET VALUE SCHEDULE OF ACCOUNTS, NOTES AND MORTGAGES PAYABLE PAYEE SECURITY .. _ DUE NOS. PAY BALANCE r W _ V: Age C.hiidren Age Employer Address Kiisd of Bus in Position Held Length of $ervi,ce � Previou's Employment