5.3. EDSR 02-10-2003 Item # 5 .3 .
. 4k
City of
Elk -�-�
River
MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Development /2(
DATE: February 10, 2003
SUBJECT: Discuss Partnership with MN Technology
Attachments
• MN Technology Marketing Folders
Background
• Minnesota Technology Inc. is the state's technology-based economic development
organization. Through a number of business services, MN Technology, Inc. helps
companies create more effective manufacturing processes,improve communications,
increase efficiency, expand market opportunities and develop corporate growth strategies.
Julie Vreeland, MN Technology's Director of Community Technology Development,will be
present at the EDA meeting to participate in the discussion.
Overview
Staff has taken an active role to create a resource from MN Technology that can be utilized
by industrial prospects and Elk River manufacturers. The goal is two-fold: to create stronger
technology-driven industrial companies by assisting existing companies and by providing a
valued service to industrial prospects. During staff's discussions with MTI,it was evident
that both the city and MTI have similar goals.
By utilizing the existing and new programs of MTI, a relationship is being fostered whereby
economic development staff would suggest MTI's services to industrial siting and expansion
prospects. The services that would be available to such businesses are outlined in the
attached MTI materials. Generally MTI's services include:
• Lean Enterprise
• Information Technology
• New Product Development
• Business Intelligence and Market Research Services
• • Customized Technology Training Services
Discuss Partnership with MN Technology
February 10,2003
Page 2 of 2
410
Over the years MTI continues to provide the services listed above to many of Elk River's
manufacturers,while at the same time developing new programs of service. One of the
recently developed programs is the Production/Operations Assessment. One of the
challenges has been to identify companies and communities that could utilize the resources
that Minnesota Technology, Inc. can provide. Their mission is to be the state's technology-
based economic development organization, contributing to the growth of Minnesota's
economy through technology. A partnership with communities and economic development
organizations would help them continue to exceed this goal.
Currently four of MTI's programs include a cost that is not covered by the State of MN and
federal government funding. The fee for those services range from$150 up to $2,000.
Several ideas for participation level options have been discussed with MTI,including:
• The EDA providing a grant/rebate for companies that use MTI's fee-based services.
The grant would be contingent on the company locating or expanding in Elk River.
It is possible that the Initiative Foundation may consider providing a matching grant
to the EDA's participation.
• Elk River develops its own program/service title to the relationship with MTI and
uses it within various public relations, communications, and direct mail campaigns.
Requested Action
Staff requests the EDA's feedback and interest level in utilizing MTI's services for industrial
• business retention, expansion and recruitment efforts.
•
Minnesota Technology, Inc. BrWest College Drive
Brainerd,
inerd,MN 56401
PHONE(218)855-8243
FAX(218)855-8141
•W W W.M I N N ES CI TATEC H NO LOG Y.C RG
Minnesota Technology, Inc. has as its mission to assist industry in
their preparation to apply, develop and commercialize technology.
Our efforts to assist companies reside primarily in the following
areas.
Technology Assistance:
> Technology Review
> Technology Solution
> Product Development Planning
> Product Development Readiness Assessment
Business Management Systems
❖ Strategy Development
> Benchmarking
> Strategic Planning Assessment
❖ Marketing Systems
> Industrial Marketing Assessment
> Top Prospects
•
> Company Profiles
➢ Customer Mini-profile
❖ Finance Systems
> Financial Statement Assessment
> Financial Management Training
➢ Financial Management and Budget Assistance
> Business Valuation Training
Lean Manufacturing Initiatives
> Lean - 101 Principles of Lean Manufacturing
> Value Stream Mapping
> Production/operations Assessment
> Software Assessment and Selections
> Supplier Qualification Systems
e-Business
> Internet Opportunity Assistance
> Internet Readiness Assessment
> Internet Strategy Development
> Website Assessments
> Internet Vendor Mediation
11,
Updated: February 3, 2003-J.A. Vreeland
a NIST Network
MEP Affiliate
M ❑ ❑ R H E A D • REDWOOD FALLS • ROCHESTER • ST . CLOUD • TWIN CITIES • VIRGINIA
BUSINESS FORUM s 7AAbe...<
� --a3
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The sheen from Minnesota's synthetic prosperity has worn away, iiORMAfi1®
N
exposing worrisome shortcomings.
INFORMATION manufacturing
Manufaèturing
deficit
deficit!
By Fred Zimmerman
innesota's weak
i utimk' , mos, , \
Mening economic
situation has " . ' ,. ?
prompted some ; ` #
well-prepared an- �.F
alysis in recent weeks, in- it
eluding the Jan. 19 Business " ril - `£` _f x
Forum by Dave Senf("Has em- '1''' '' S, `'
i a � i � ;, 111 J10V °�XII 9tti��
ployment peaked in Minneso- F A i ', , , 4
to s manufacturing sector? ). _ _ ,
Several of us have been con-
•
cerned about Minnesota's
gradually shrinking industrial`"`
prowess for many years.It has $
not always been a popular cru- r
sade.
When the precarious mar- From iant 3M to ti —_ F
ket position of Minnesota's ' '''''.- 42,4a !`10it ,
mainframe computer compa- S B Foot Tanning Co. 4` I r ' f 1
Hies was called to the attention (a supplier to Red #: 1 t 3 '
of state officials in the early )
1980s,we were told"it couldn't Wings Shoe CO.)to .�s�< <3,,, -.:..7-0
happen to our companies."But Reell Precision Manu- ter: Y,IIt s� ( :
it did. $:�( r �;
factoring in Vadnais � -,� � �,� i
In the mid-1980s, when we -- :
suggested that Minnesota's Heights, Minnesota x �. �r:• 'k * t,
herculean effortsoin
g g into the manufacturers face r �° 1 ,� 4,
procurement of the Saturn P s a 0
plant might be better aimed at tough challenges at '" ' `',, 4' ,"',
securing a replacement for the home and abroad,
vintage Jeep plant in Toledo, n� ,. fi , i ' ti
Ohio, which was then sched-
uled for closing, the reply was I lip 01010
"Minnesota will get Saturn."
But the low-priced Saturn •
car had to be built close to sup- ers take all of the adjustment. upon which investment. The them.They are investing heav-
pliers. Jeeps were higher-mar- When the British scholar yields vary greatly. Expendi- ily in modern production
gin vehicles that sold well in Eric Trist was a visiting profes- tures, such as lucrative early equipment.Their quality is im-
the colder regions of the coun- sor at the University of Minne- retirements for teachers, do proving,We can compete, too,
try.Ultimately a new Jeep plant sota a few years ago, he sug- not improve the classroom ex- but not If we treat the matter
went to Canada and the Saturn gested "a systematic view of perience. casually.
plant to Tennessee, the environment is always a Nearly half of Minnesota's O. The service economy will
When it was suggested that necessary prelude to improve- science and math majors come ball us out. No way. Some hos-
Minnesota's manufacturing ment." from the private colleges and pitals, such as Mayo, Abbott-
employment was holding up , . most of the rest from the Uni- Northwestern and Minneapo-
numerically because we were Reviewing perceptions varsity of Minnesota— a pre- Ifs Children's, are prominent
adding jobs inlower-paid in- Minnesota's view of the en- mier land grant university and enough to attract customers
dustries while we were losing vironment has been proud, of- a great treasure for the state.j" from far away lands.Although and supplier systems in other
employment in the higher- ten smug, occasionally naive, Some of the technical college medical services typically are parts of the world and then fills
paid industries, we were told sometimes wrong, but almost programs also seem to have
that the idea was"ridiculous." never systematic.Even when it � viable on their own,most other the gaps.Sweden has unfolded
Y pal off well. But just because services companies depend some novel approaches to
Now Minnesota's economy has been provided,practical we have a publicly supported heavily on industrial compa- handling bankruptcy.
is clearly weaker—a bit weak- factual analysis has not always institution of higher learning vies for many of their custom- Minnesota does not have to
er than other Midwestern been appreciated. roughly every 30 miles does not ers.In our study of 232 manu- have the problems that it has.
states. As others have ob- Some of our commonly mean people are learning the facturing counties over 20 It is a far higher-cost state than
r served, Minnesota has lost all held perceptions should be re- skills necessary in an ever more years,we found that when the those other states and nations
Kof the manufacturing jobs viewed,including: competitive world. industrial economy was de- that are gaining employment.
gained during the synthetically ' Minnesota is a high tech- D► Minnesota's high qualitydining, there was essentially But the state does have many
prosperous 1990s. The decline nology state.When?We are liv- of life attracts companies.What no growth in the service strengths — some excellent
started in mid-1998, when ing off the legacy accumulated companies?Industry moves in economy,except for some lint- companies, some dedicated
poorly negotiated trade agree- when we made the big com- response to economic condi- ited growth in health care. public officials, some enlight-
ments, lack of enforcement of puters here. Technology is in- tions,mostly related to serving onversely,when manufactur- ened executives, a strong in-
security and antitrust laws,and creasing throughout the world. customers.Minnesota is a very gwas growing, the service
burgeoning capricious litiga- From 1990 to 2000, the U.S. long way from international sector grew substantially.
tion combined to weaken U.S. share of the refereed articles in ports and emerging markets.
industry. science, engineering and That means we must be more
Worse, the jobs aren't as mathematics dropped from 40 creative and more efficient to Opportunity knocks The author
good. The computer coma ,f
p compa- percent to 30 percent. What overcome our remoteness. Minnesota's current eco- _
vies are gone. Honeywell's does that sayabout the geogra- The medical device com a- Fred Zimmer-
P atomic downturn presents.an
headquarters has left town. phy of technology? g g nies will lead the way.Theyare man is rofes
Y :opportunity we should not p � �,:
ADC Telecommunications has ) Minnesota schools are excellent companies and wesor of engineer
P miss.Purdue . Dan Schendelonic of ingand manage-
shrunk. The sales of many of outstanding. Baloney!We have are extremely fortunate to have Pude provided convincing
I the well-equipped supplier some highly dedicated teach- them. However, theyare not ment at the Uni-
companies are off substantial- ers, but Minnesota has been large enough to carry Min- evidence for a postulate long versity of St.
g g rY recognized in business.Abrupt Thomas. He and
ly.Not surprisingly,the shrink- aiming at the wrong targets— nesota economy. g
Y falloff promotes action.Gradu= Dave Beal are
age in the number of good in- other states. Many countries The downturn In the econ- al drift does not.
dustrial jobs has left Minnesota rank far above the United omy Is cyclical. Some of it is, Minnesota has been drifting Warksring
with astronomical budget deft- States in the proficiency of but much of the weakness is for years, During this current ;The Vital Link between
cits. their students in math,science, structural. As outsourcingProduction and Prosperity,"Dear-
Yet we are all in this togeth- readingand languages. This is downturn,we should work to- born Press,2002.His a-mail is
ggrows,supplier bases are being gather to find creative and fftizlmrnermanastthomas.edu.
er.Minnesota must improve in not surprising. Most of these strengthened elsewhere. Peo- cost-effective ways to revitalize
order to compete and we are students spend a lot more time ple in other lands are working the state's economy.There are
not going to make progress as a in school. hard to achieve the American helpful examples. Indiana's
community if each segment )- investments in education standard of living they see on economic development pro-
rigidly protects its own posi- pay off In a stronger economy. television. They are building grams appear to be more cost" dustrial supplier base and
tion while suggesting that oth- Sometimes, but it depends factories while we are closing effective and more profession- some excellent colleges and
al than ours in Minnesota.Wis- universities.We should be able
cousin's higher-education sys= to make things better,
tem is probably better and Of course, this will involve
more focused than ours. ' both sacrifices and much
Tennessee has developed greater efficiency on the part of
some innovative programs in.' all of us. But unless Minneso
volving land development, ta's industrial economy can b
iip III utility coordination and per- restored, we will have budge
matting. Singapore routinely deficits and a weak economy_:.«
• benchmarks governmental forever.
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G 13065 Orono Parkway Community Profile 2003
V Elklk River,MN 55330
Elk River, Minnesota
The City of Elk River is located 35 minutes north/northwest of Downtown Minneapolis.
County: Sherburne
Sherburne County is the 44th fastest growing county in the nation(by percent change from
April 1,2000 to July 1,2001).
Source:U.S. Census Bureau,Population Division.
County Seat: Elk River Metropolitan Area: Minneapolis-St.Paul MSA
Senate District#16: Senator Betsy Wergin Senate District#48: Senator Mike Jungbauer
House District#16B: Rep.Mark Olson House District#48A: Rep.Tom Hackbarth
Congressional District#6: Rep.Mark Kennedy •
Population
20,000 17,380 80,000
16,447,,,,,007 64,417 68,177
15,000 �' 60,000 .361-08,7
M 1 81 1
11,143.44.808M41188 sE 51.1 s,166'
a f N9 41945.468 � 61�16-
10,000 888 88 . 0 c 40,000mmosi
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6,7854880.1146118818840111888888881i29 906 . t 1 a; � 1 �8i6
8g 888 _6 1. 18r6 e8e M a4 .6 8114
18
5000 2,252,44885888181088068888888.d.583881-08888!45 20,000 18344 :. r� Le a i e m4
1970 1980 1990 2000 2001 1970 1980 1990 2000 2001
Elk River Sherburne
2000 Median Age: 1999 Median Household Income:
Elk River 32 years Elk River $58,114
Sherburne County 31 years Sherburne County $57,014
State of MN 35 years State of MN $47,111
Source:U.S.Census Bureau,Census 2000 Source:US.Census Bureau,Census 2000
Phone: 763.441.7420
Fax:763.441.7425
www.ci.elk-river.mn.us I
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City of
Elk , 1
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13065 Orono Parkway
Elk River,MN 55330
Employment
Independent School District 728 Education n/a n/a 1000
Sherburne+ ounty Govei ent:. .. ... 433 31 464:
Guardian Angels of Elk River,Inc. Nursing/Housing 143 229 372
Gr River Energy El c I tility 31 . ._ . ... 324 .
Wal-Mart Retail Store 274 53 327
Menards Retail Store n/a n/a 164
tt ooration. . Presse re ontr sl e i 4 I
Coborns Grocery Store 29 139 168
Alltool Pinnacle Design&Mfg., Inc. Metal Stamping 136 2 138
TT e Crete C€ ip es,li . Pre t Concrete educts 1 1
n/a=not available
Employment Estimates Occupation and Wages
Sherburne County
b S 5z .. 4 t6 4
"Prthg
9. R I IMB4 yet ,,
Goods producing Computer programmer $31.56
(Construction and manufacturing) 5,035 Tool&die maker 24.95
Service Producing Machinist 19.25
(Transportation,wholesale and Welder 17.77
retail trade, services, etc.) 12,508 Office Support 14.52
TOTAL 17,543 Assembler 13.59
Source:MN Covered Employment and Wage Data Source: Minnesota Department of Economic Security:Minneapolis-
Labor Force:36,471 St.Paul MSAThird Quarter 2002 Salary Survey
November 2002 Unemployment Rate:4.4%
Source:MN Dept of Economic Security:Sherburne County
Unemployment Statistics
Transportation
Highways Air
Interstate Highways 7 miles to 1-94 Anoka County/Blaine Airport
Federal Highways U.S. 10,U.S. 169 St. Cloud Regional Airport
State Highways 101 Minneapolis/St. Paul International Airport
Rail •
Intra-City & Intra-County
Burlington Northern Line Pioneer Taxi
Sego Taxi and Package
Bus River Rider Heartland Express
Greyhound Bus Lines
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0 Elk River,MN 55330
Taxes
hipot—, t 0 4,, M °0 3 hs �i s � r S as
2003 estimate 136.370 44.515 School District 728 42.943%
2002 139.799 43.600
2001 128.544 30.596 City of Elk River 44.515%
2000 119.450 30.250 Sherburne County 46.223%
1999 121.130 29.324
1998 111.504 26.255 Misc.Jurisdictions 2.689%
1997 112.767 24.255
Commercial/Industrial Taxes:
Minnesota real estate taxes are based on fair market value estimates. Tax capacity times the tax capacity rate
equals property taxes. Tax capacity is the value of the property under $150,000 times 1.5%plus any value
over$150,000 times 2.0%.
*Total tax rates do not include Market Value School Excess Levy Referendum rate of 0.07603%and state tax of 55.000%
2003 City General Fund Budget$7,687,900
City Bond Rating: A-2 Moody's
I Housing and Development
3"'"og; ,tr �''', sm i ;orw t44��{f .� n� . so �r to pA:c
=oe_..,kko _ram„ ,.3: __ _ .-' .,•.a' . '._ ,iA..- ne'., _ o,:.a., e 1 i4 : t i9 ' .'..1.T. ::':.,='1.4
fl $ �;
$44501,578 40M
541,877,967_age:
40M $38 613,568 ' l
$32 793,381 4,10-14,44,41115,1,11a011 4 ''F 30M
OM '$ � ,0� a $23,920,652Aital
3 �,93 2 20M k
444,46
69 %14,t,
Maw, PUB , 1 k Ma a , �:` $8,943 050 a
20M ' 10M 4� a $8118,842
1 ra �, - �.,, $452 41570
1998 1999 2000 2001 2002 1998 1999 2000 2001 2002
Source: City of Elk River Building and Zoning Department Source: City of Elk River Building and Zoning Department
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A .�„Migg . t 4'.�; { .0. 1 1,1i �•'°.i,d u4' op `ttl.�R pit i i °'`,' p J1 '�
2002 224 183 2001 280 $184,445 n/a
2001 256 163 2000 306 $174,820 $160,000
2000 284 172
1999 340153 004 $142,559
1999 205 177
$
1998 289 201 1998 346 $139,470 $127,800
1997 224 182 1997 253 $129,263 $120,900
Source: City of Elk River Building and Zoning Department
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City of
E1k
River
13065 Orono Parkway
v Elk River,MN 55330
Business and Community Services Utilities and Services
Medical Services Water
Seven Clinics,Twelve Dentists,Nine Chiropractors Municipal water source: Wells
Nearest Hospitals Storage capacity: 2,500,000 gallons
Mercy Hospital— Pumping capacity: 6.7 mgd
Coon Rapids, 14 miles Tapwater hardness: 17 grains of 213 ppm
Monticello/Big Lake Community Hospital— Average demand: 3,700,000 gallons per day
Monticello, 12 miles Peak demand: 5,300,000 gallons per day
Rates and billing: Elk River Municipal Utilities
Mail Services (763) 441-2020
First Class Post Office and Express Service available Electricity
Banking and Finance Electric utility: Elk River Municipal Utilities
Financial Institutions and Deposits—2002 (763) 441-2020
11
First National Bank of Elk River—$366,000,000 Electric utility: Connexus En60gy
0
The Bank of Elk River—$231,567,000 (612) 323-260
American National Bank of MN—$9,141,324 Natural Gas
Wells Fargo Bank,NW Suburban District— Gas service: CenterPoint Energy Minnegasco
$575,000,000 (Retail Deposits) Rates and billing: (612)372-4727
Sanitary Sewer
Gross Sales — 2000 Sewer service: Municipal
Sherburne County—$1,489,083,881 Plant capacity: 1,640,000 gallons p/day
Elk River—$1,059,327,891 Average demand: 965,110 gallons p/day
Source:Minnesota Department of Revenue:Sales&Use Tax Statistics 2000 Rates and billing: Elk River Municipal Utilities
Newspaper (763) 441-2020
Elk River Star News (weekly) Telecommunications
Star Tribune and St. Paul Pioneer Press (daily) Company: Qwest Communications
Rates and billing: 1-800-244-1111(Residential)
1-800-603-6000 (Business)
Company: NorthStar Access
Rates and billing: 1-877-225-6754
Refuse/Recycling
Provided by the city through contracts with private haulers
Rates and buffing: Elk River Municipal Utilities
(763) 441-2020
Cable TV
Cable service: Charter Communications 1111
Rates and billing: (612) 682-5980
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CL City of
Elk
iz
River
13065 Orono Parkway
V Elk River,MN 55330
K-12 Education
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Elementary 6 4,464 K-5
Junior High 4 2,348 6-8
Senior High 3 2,747 9-12
Area Learning Center 1 301 8-12
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St.Andrew's School 341 K-6
Rivers Christian Academy 320 K-12
St.John Lutheran School 260 Pre-K-8
Solid Rock Christian Academy 32 K-12
Area Post Secondary Schools
Technical college: Anoka-Hennepin Technical College; www.ank.tec.mn.us
Distance: 9 miles
Community college: Anoka-Ramsey Community College; www.an.cc.mn.us
Distance: 15 miles
Universities: University of Minnesota,Twin Cities; wwwl.umn.edu
St. Cloud State University; www.stcloud.msus.edu
Distance: 35 miles
Community Contacts
Catherine Mehelich Jeff Gongoll
Director of Economic Development President
City of Elk River Elk River Area Chamber of Commerce
13065 Orono Parkway 509 Highway 10
Elk River,MN 55330 Elk River,MN 55330
(763) 441-4905 (763) 441-3110
cmehelich@ci.elk-river.mn.us eracc@elkriverchamber.org
www.ci.elk-rivermn.us www.elkriverchamber.org
Business Financing and Incentive Programs
The City of Elk River and its EDA and HRA participate in and have access to the following programs: Tax
Increment Financing,Tax Abatement,Industrial Revenue Bonds, SBA Loan Programs, Local Micro Loan
Fund, Initiative Foundation,Minnesota Investment Fund, Sherburne County Business Development Fund,
and the Elk River Business Incubator.
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d City of
E1k ,Rive
13065 Orono Parkway
Elk River,MN 55330
Commercial and Industrial Areas
5 Commercial
6 1.Central Business District
2.Elk River Plaza Mall
193"Avenue
7 3.Barrington Retail/Office
A 411111
B 4.Elk Park Center
School Street 5.Hillside Crossing 11
0 2 3 6.Hillside Crossing
F Main Street 1 7.Hillside Crossing South
MISSISSIPPI RIVER Industrial
Ci
A.Elk River Industrial Park
B.McChesney Industrial Park
173"Avenue E C.Rail 10
101
D.RR Industrial Park
do a E.Ar-Mon Industrial Park
F.Elk Path Business Center
169 zra G.Elk River Business Park
H.Cascade Industrial Park
H
D
E
*See the city website for the most current listings of available industrial sites.
www.cielk-rivermn.us
Phone: 763.441.7420
Fax:763.441.7425
www.ci.elk-river.mn.us
MCCF
MINNESOTA COMMUNITY
CAPITAL FUND
Class A Members
Carlton County Prairieland Economic Development Corporation
Duluth Red Wing Port Authority
Faribault County St.Cloud BRA
Great River Energy St.Louis County
Itasca Development Corporation Winona
Marshall
Minnesota Power
Class B Members
Becker County Milaca
Brainerd Lakes Area Development Corporation Mille Lacs Electric Cooperative
Cloquet New Ulm
Detroit Lakes Pine Economic Development Corporation
• East Central Energy Pipestone County
East Range Joint Powers Board Preston
Elk River Sleepy Eye
Fergus Falls Stewartville
Hibbing
Jackson County(Jackson,Lakefield,Heron Lake,&Okabena)
Class C Members
Aitkin County Madelia
Big Lake&Big Lake Township Moose Lake
Blue Earth New Prague
Buhl Northfield
Cannon Falls St. Joseph
Chatfield St.Peter
Dodge County EDA(Claremont,Dodge Center,Hayfield, Sherburne County
Kasson,Mantorville&West Concord) Tracy
Economic Development Partnership of Wright County Wabasso
Hutchinson Warroad Port Authority
Isanti West Central Initiative(Barnesville,Fergus Falls,
Kandiyohi County Rural Finance Authority Elbow Lake, Glenwood,Alexandria,
Kenneth L.Kellar Foundation Clay County&Osakis)
Lake Crystal Worthington
Luverne
1110
Geographic Distribution of MCCF Members
*or
**
**
* = Class A
** *
= Class B
**
* *
*
* = Class C
*
*
* *
'fit
* *
**
*
MCCF
• MINNESOTA COMMUNITY
CAPITAL FUND
Board of Directors and Staff
Steve Dusek (Chair) Robert Gervais (Vice Chair)
CEO Community Development Director
Prairieland EDC City of Tracy
1 Prairie Drive 372 Morgan Street
Slayton,MN 56172-1142 Tracy,MN 56175
Phone: 507-836-6656 Phone: 507-629-5528
Fax: 507-836-6309 Fax: 507-629-5530
Email: sdusek@prairielandedc.com Email: bgervais@tracy.govoffice.com
Term expires August 2004 Term expires August 2005
Brian Fritsinger (Treasurer) Cathy Mehelich (Secretary)
City Administrator Director of Economic Development
City of Cloquet City of Elk River
1307 Cloquet Avenue 13065 Orono Parkway/PO Box 490
Cloquet, MN 55720-1656 Elk River,MN 55330
• Phone: 218-879-3347 Phone: 763-441-4905
Fax: 218-879-6555 Phone: 763-441-7425
Email: bfritsinger@ci.cloquet.mn.us Email: cmehelich@ci.elk-river.mn.us
Term expires August 2005 Term expires August 2006
Barb Hayden Duane Johnson
Planning Director Planning Director
St.Louis County Dodge County EDA
227 West First Street, #10.0 22 6th Street East,Department 123
Duluth,MN 55802 Mantorville,MN 55955-2240
Phone: 218-725-5008 Phone: 507-635-6272
Fax: 218-725-5029 Fax: 507-635-6193
Email: haydenb@co.st-louis.mn.us Email: duane.m.johnson@state.mn.us
Term expires August 2004 Term expires August 2004
Staff
Scott Martin Bob Palmquist Dana Stanton
CEO Senior Loan Officer Marketing Assistant
MCCF MCCF MCCF
13911 Ridgedale Drive, Suite 260 221 West First Street 13911 Ridgedale Drive, Suite 260
Minneapolis,MN 55305 Duluth,MN 55802 Minneapolis,MN 55305
• Phone: 800-860-6223 Phone: 800-860-6223 Phone: 800-860-6223
Fax: 952-541-9684 Fax: 218-529-7592 Fax: 952-541-9684
Email: smartin@ or bpalmquist@ or dstanton@mncommunitycapitalfund.org
• MCCF Loan Approval Process Flow Chart
Loan Officer Contacted
By MCCF Member
Gather Preliminary Details Project does not fit MCCF
of project from MCCF member criteria or not ready to proceed
Denies loan
Loan Officer contacts by phone Project does not fit MCCF ,request
Project stakeholders and Bank criteria or not ready to proceed
to gather more info Move forward
with site visit
With project qualified,Loan Officer Explore alternative funding
has site visit meeting with applicant, structure to have project meet
bank and stakeholders. Reviews MCCF loan criteria
application forms and explains process,
timeline,fees and costs
_Reconsider Loan Officer receives completed Provide CRF with copy of Reconsider
request application& proceeds with loan review, application for their review re�C uest
credit analysis and recommendation
CRF reviews application and
Denies loan Loan Officer receives MCCF member performs their credit analysis Denies loan
request approval and presents application I purchase
details and recommendation to MCCF CRF establishes preliminary
loan committee via teleconference loan purchase price Member
Denies loan ( recourse?
request MCCF loan committee approves CRF approves purchase of
loan and communicates approval loan and issues loan
terms and conditions purchase commitment
Member I
recourse? MCCF loan commitment and
CRF loan commitment provided to
applicant and MCCF member
Loan Officer initiates preparation of CRF reviews loan documentation
loan documentation through legal for consistency with commitment
counsel consistent with commitments
Loan Officer coordinates loan closing Closing agent faxes CRF
with borrower,bank lender,CRF and copies of executed documents
closing agent(title company)
Loan is closed,fees collected and funds ICRF wires funds to escrow agent
wired to borrower upon receipt of funds
wired from CRF CRF receives executed loan
documents
Timelines
MCCF Loan Approval Process will average 2 weeks after receipt of completed
application and MCCF Member's approval of the project.Loan Committee meetings
held on an as needed basis.
Community Reinvestment Fund's Approval Process will be between 2 weeks and
4 weeks from receipt of application.The turnaround time is based on loan size.
2 weeks for loans up to$250,000,3 weeks for loans up to$1 million,and 4 weeks
for loans over$1 million.
•
•, . MCCF
• MINNESOTA COMMUNITY
CAPITAL FUND
LOAN APPLICATION
Name of Business (Legal Name):
Address:
City, State, Zip:
Business Phone: Fax:
Federal Tax ID#:
Principals
Name:
Address:
City, State, Zip:
Phone:
Social Security#:
• Type of Business
Sole Proprietorship Corporation Partnership
Date Established
Loan Request Amount
Participating Bank Lender
Name:
Address:
City, State, Zip:
Contact Person: Contact Phone:
Describe the type of business in which the applicant is engaged.
Describe project for which applicant is seeking an MCCF loan.
•
•
MCCF
MINNESOTA COMMUNIT
• CAPITAL FUND
EXISTING BUSINESS FINANCING OBLIGATIONS (Date of most recent balance sheet)
ORIGINAL
AMOUNT/ PRESENT MATURITY INTEREST MONTHLY PAYMENT
CREDITOR NAME DATE BALANCE DATE RATE PAYMENT STATUS
PROJECT FINANCING SUMMARY
SOURCE AND USE OF FUNDS
MCCF BANK EQUITY OTHER OTHER TOTAL
Property Acquisition
Site Improvement
Building Renovation
New Construction
IIIMachinery&Equipment
Working Capital
Inventory
Debt Refinancing
Other
Other
Total
PROPOSED FINANCING TERMS
MCCF BANK EQUITY OTHER OTHER TOTAL
Amount $ $ $ $ $ $
%of Project Cost % % % % % %
Term(years) yrs yrs yrs yrs yrs yrs
Interest Rate % % % % % %
Debt Service yrs yrs yrs yrs yrs yrs
Lien Position
. Collateral
Guarantee
2
MICICF
MINNESOTA COMMUNITY
CAPITAL FUND
ADDITIONAL REQUIRED INFORMATION
The information included in the attached "Exhibit A—Application Exhibits" shall also be provided to MCCF as
part of this loan application
I declare that the information provided on this application and the accompanying exhibits is true and complete to
the best of my knowledge. I understand that the Minnesota Community Capital Fund has the right to verify this
information and will be in contact with those individuals and institutions involved in the proposed project. I also
understand that if this loan is approved it will be sold to the secondary marketplace. I authorize the Minnesota
Community Capital Fund to share information contained in this application process with prospective purchasers
in order to evaluate the feasibility of selling this loan.
By
Its
Date
•
Submit completed application to: Minnesota Community Capital Fund
Attention: Bob Palmquist
Senior Loan Officer
221 West First Street
Duluth,MN 55802
Direct: 218-529-7562
Toll-free: 800-860-6223
Email: bpalmquist@mncommunitycapitalfund.org
•
3
M�CCF
MINNESOTA COMMA_\I"11
• CAPITAL FUND
Exhibit A
APPLICATION EXHIBITS
Exhibit 1 Exhibit 8
History and Description of Business Interim Statement
Briefly describe the past operation of the business and/or events Provide balance sheets and an income statement that is less
leading up to its creation.Include information on the product lines than 90 days old.
or services,industry,management and key employees,the
operation's growth and affiliates. Exhibit 9
Exhibit 2 Projections
Provide two years proforma balance sheets,income statements
The Project and Related Marketing Plan and cash flows stated on a monthly and annual basis.Define
Describe the proposed project for which financing is being the assumptions used to derive the projections.
requested.Detail the marketing strategy and describe how it will
support the planned business expansion or start-up.Include Exhibit 10
information on the following:
• current customers and target markets(provide copies of Resumes and Personal Financial Statements
contracts,purchase orders,etc.which relate to the loan Provide resumes of all principals as well as current,dated and
request) signed personal financial statements on all principals with a
• manufacturing process and materials significant financial interest in the business.
• major suppliers
• competition and comparison of products
• pricing,distribution,and promotion Exhibit 11
41) Affiliates
Exhibit 3 Provide a description of any affiliates or subsidiaries of
business or principals requesting assistance,as well as balance
Detailed Source and Use of Proceeds sheets and income statements for past two fiscal years.
Detail how the total project amount will be used including all
sources of funds.Attach written cost estimates.
Exhibit 12
Exhibit 4 Appraisals/Proposed Lease/Purchase Options or
Agreements
List of Collateral An independent appraisal may be required for any real estate
Provide a detailed list of all collateral offered,new and existing,its which is a subject of the proposed financing,or which is
value,and security position by funding source. offered as a major source of collateral to secure the loan.Also
include copies ofexisting or proposed lease(s),purchase
Exhibit 5 options or agreements,or other financial arrangements.
Commitment Letters Exhibit 13
Include firm commitments from banks and other participating
lenders stating the terms and conditions of their financing. Partnership Certificate of Authorization or Corporate
Certificate of Authority
Exhibit 6 Include minutes of the corporate meeting adopting this
certification,where applicable.Evidence of corporate action
Impact on Community/Jobs approving the borrowing will be required at closing.
Describe how the proposed project will benefit the community or
area in which the business is located.Briefly describe direct and Exhibit 14
indirect employment benefits,effect on the tax base(if any),and
benefits to other businesses and organizations. Other Required Attachments
Exhibit 7 • Copy of last year's business income tax statement.
• Copy of last year's personal income tax statement of
• Financial Statements principals.
Provide balance sheets and income statements for the past three • A letter from the County Clerk and County Treasurer
fiscal years. verifying that there are no outstanding judgements or tax
liens against the business or owners of the business.
• Evidence of payment of last quarter's payroll tax.
• Evidence of Worker's Compensation insurance coverage.
4 .
e
MCCF
III MINNESOTA COM MUNJTY
CAPITAL FUND
Exhibit B
LOAN CRITERIA
FINANCING POLICIES CREDIT CRITERIA
Loan Amounts: Equity or Cash Requirements:
• $50,000 minimum • Loan applicants must demonstrate an acceptable level of
• $2,500,000 maximum project equity, with a minimum of 10% equity provided by
the borrower. Subordinated debt within the same project
Eligible Projects: financing may be considered as additional equity, subject to
an intercreditor agreement. All other criteria will apply,
• Funded project must be within a member's area of including subordinate debt,when calculating debt coverage.
operations.
• Borrower may be a for-profit business entity, non-profit Collateral Requirements: `
entity,cooperative,or local unit of government.
• A financial institution must be a participant in the project • Loan collateral coverage must be at least 100% of the
financing. MCCF loan amount on appraised value of assets, less all
senior debt.
Allowable Use of Proceeds: • MCCF will consider the following collateral positions: first
security interest, shared first security interest, subordinated
• MCCF financing assistance may include, but is not limited security interest and shared subordinated security interest.
to: fixed assets, including land and building purchase,
building construction, leasehold improvements and Debt to Worth:
renovations; acquisition, renovation or moving machinery
and equipment; and working capital loans secured by fixed • MCCF will consider financing projects that have a tangible
assets with fixed repayment schedules(not lines of credit). net worth ratio on an actual and proforma basis of no greater
• Loans may not be used to refinance existing debt. than 10 to 1 (10% project equity or greater). Each project
Ineligible Use of Proceeds: shall be analyzed on its own merits and its ability to service
both existing and new debt.
• Speculative real estate developments. • MCCF borrowers (real estate holding companies excluded)
Purchase of equity positions in business enterprises. should have a tangible net worth of 5 to 1 or less, based
• upon their most recent financial statements and, on a
Interest Rates: proforma basis,reflecting the new proposed debt.
• Adjustable and fixed rate loans are available, with rates Personal Guarantees:
determined by the MCCF member originating the loan.
■ Personal guarantees will be required for all owners with
Loan Term Length: 20%or greater ownership in closely held businesses.
• The term of each loan will be determined on a case-by-case Management Experience & Company Performance:
basis, with the primary factor being the collateral offered.
Loans secured by real estate will generally not exceed 20 • The MCCF will require that the project have capable,skilled
years, and loans secured by machinery and equipment will management through experience or expertise in the
generally support a loan term of up to 10 years, not to applicant's industry, either through previous successful
exceed the depreciated life of the asset being financed. business ownership or through appropriate managerial
When possible,the MCCF loan will coincide with the term support services. Borrowers having erratic or
of the participating bank loan, including any balloon undocumented earnings, or borrowers having new and
maturity provisions. unproven management, will require more loan risk sharing
by the MCCF member originating the loan.
Fees and Charges:
Repayment Ability:
• A 1.75% loan origination fee will be charged to all MCCF
borrowers. This fee will be assessed only for approved • Applicants must demonstrate adequate historical cash flow
loans,but must be paid at or prior to loan closing. showing trends that support debt service coverage of at least
• • A 0.5%loan underwriting fee shall be paid by the borrower 1.1 to 1. Proforma financial cash flows must also support
at loan closing., debt service coverage of at least one to one.
• Borrowers are responsible for paying all legal and other loan
closing costs incurred by MCCF.