7.0. EDSR 03-10-2003 Item # 7
111 City of
Elk
River
MEMORANDUM
TO: Economic Development Authority
CC: Lori Johnson, Finance Director
FROM: Catherine Mehelich, Director of Economic Development
DATE: March 10, 2003
SUBJECT: Micro Loan Application: Lake Assault Custom Boats
Attachments
• Finance Committee Minutes, March 4, 2003
• Staff Memo to Finance Committee, February 28, 2003
• Application—Lake Assault Custom Boats
• City of Elk River Micro Loan Fund Policy
Issue
On March 4, 2003, the Finance Committee reviewed a Micro Loan application from Jerry
Atherton of Lake Assault Custom Boats. The Finance Committee unanimously
recommended that the EDA consider awarding Lake Assault Custom Boats a $50,000
Supplemental Micro Loan. The loan will be used to purchase machinery and equipment
necessary for Lake Assault Custom Boats to begin operations in Elk River.
Jerry Atherton,Lake Assault Custom Boats President,will be available to discuss the
proposed project and answer questions.
Action Requested
Staff requests that the EDA consider approval of the application for Lake Assault Custom
Boats for a $50,000 Supplemental Micro Loan per the recommendation of the Finance
Committee with the following terms:
• Personal guarantee from owner and wife
• Additional financing sources secured
• Secured by 1St lien position on equipment
• Term: 10-year amortization, 3-year balloon payment @ 3.25%
• Structured as participation loan with M & I Bank
• Job performance agreement (2.5 full-time jobs @ no less than $17.00/hour within 2
years
EDA Finance Committee Meeting Minutes
Tuesday, March 4, 2003, 5:00 PM
Elk River City Hall
Present:
Jerry Atherton, President,Lake Assault Custom Boats
Patrick Pelstring, President, Pelstring Capital Corporation
Committee Members/Staff
x Cliff Lundberg x Jim Simpson _Dan Tveite
x Chris Carlson Jeff Gongoll x Tom McNair
x Paul Motin x Catherine Mehelich-Staff x Heidi Hall-Staff
Micro Loan Portfolio Report
Catherine Mehelich presented a summary of the Micro Loan balance sheet. Ms. Mehelich
stated that Carpe Kairos (Custom Cutter Grinding) and Sportech have recently paid their
balances in full. Ms. Mehelich also stated that Riverside Manufacturing has verbally
requested a loan extension but has not provided staff with the requested information to
process the request. Due to staff's repeated attempts to obtain the information, the Finance
Committee directed staff to consult with the City's attorney regarding the issue.
Presentation by Jerry Atherton of Lake Assault Custom Boats
Staff provided the Finance Committee with the following information prior to the meeting.
• Issue
Staff has received a request by Jerry Atherton,President of Lake Assault Custom Boats for a
Supplemental Micro Loan in the amount of$50,000 to be used for equipment purchase.
The loan is proposed to be structured as a participation loan with M & I Bank of Coon
Rapids.
Background
Lake Assault Custom Boats is a start-up manufacturer of custom fishing boats. The
company has identified a very targeted market of elite fishermen. The company has
identified 7,500 square feet of lease space in the Decker building for its manufacturing
operation. The company owner,Jerry Atherton, has extensive experience in the sheet-metal
industry.
The applicant proposes to use the micro loan funds to purchase equipment necessary to
initiate production and sales of the boats. The company has financing commitments for
equity investment and a bank line of credit. In addition, the company has submitted an
application for financing from the Initiative Foundation. The sources and uses of the
project are as follows:
Bank Line of Credit $100,000 Working Capital
Private Equity $ 80,000 Working Capital
Initiative Foundation $ 75,000 Working Capital
• EDA Loan $ 50,000 Equipment
Total Project $305,000
EDA Finance Committee Meeting
March 4,2003
Page 2 of 3
• The applicant has proposed that the EDA take a first position on the equipment. The
preliminary equipment list is attached. The applicant proposes to create 7 to 12 full-time
jobs within the first two-years of the project. Proposed wages are not less than $17.00 per
hour.
Mr.Atherton presented the following information to the Finance Committee:
• Boat Design Concepts
• Customer Experience
• Market Niche
• Existing Marketing Materials
• Similar Boat Designs
• Operational Milestones
• Equipment Shortlist
• Owner Background
Pat Pe'string provided background information on the project's financial sources and future
commitments.
Finance Committee Discussion
The Finance Committee asked Mr. Atherton several questions regarding boat design,
employees, suppliers and marketing. Most of the discussion reflected marketing issues. The
• Finance Committee expressed that Mr. Atherton should consider additional marketing
efforts that may ultimately increase his estimated$10,000 marketing budget.
Finance Committee Recommendation
Jim Simpson moved to recommend to the EDA to approve the $50,000 Supplemental
Financing Loan to Lake Assault Custom Boats subject to the following items:
• Personal guarantee from Mr. and Mrs. Atherton
• Confirmation that additional financing is in place
• The loan is to be secured by a 15`lien position on the machinery and equipment. The
loan is proposed to be structured as a participation loan with M & I Bank.
Tom McNair seconded the motion. The motion carried 5-0.
Continue Discussions on Proposed Amendments to the Micro Loan Policy
The Finance Committee continued their discussion from the February 18, 2003 Finance
Committee meeting regarding the proposed amendments to the Micro Loan Policy. The
Finance Committee suggested the following amendments to the respective sections of the
Micro Loan Policy:
• Eligible Uses: Investment property development should be an eligible use of the
Micro Loan with the requirement that speculative projects are 50%pre-leased and
that relocation of the business would require review by the Finance Committee.
• Industrial Incentive Program: Continue to target only the West Business Park for
• this program in conjunction with the City Strategic Economic Development Plan.
EDA Finance Committee Meeting
March 4,2003
Page 3 of 3
• • Program Objectives: Add"The project results in new job creation in the City of Elk
River" as an objective.
• Compliance with the Business Subsidy State Statute: Include "Each company
receiving a loan amount in excess of$75,000 from the EDA Micro Loan Fund shall
be subject to the provisions and requirements set forth by the City of Elk River
Business Subsidy Policy and Minnesota State Statute 116J.993." as new verbiage in
this section.
•
•
\ / Item # 2
• City of
Elk
River
MEMORANDUM
TO: EDA Finance Committee Members
CC: Lori Johnson, Finance Director
FROM: Catherine Mehelich, Director of Economic Development
DATE: February 28, 2003
SUBJECT: Micro Loan Application: Lake Assault Custom Boats
Issue
Staff has received a request by Jerry Atherton, President of Lake Assault Custom Boats for a
Supplemental Micro Loan in the amount of$50,000 to be used for equipment purchase.
The loan is proposed to be structured as a participation loan with M &I Bank of Coon
• Rapids.
Background
Lake Assault Custom Boats is a start-up manufacturer of custom fishing boats. The
company has identified a very targeted market of elite fishermen. The company has
identified 7,500 square feet of lease space in the Decker building for its manufacturing
operation. The company owner,Jerry Atherton, has extensive experience in the sheet-metal
industry.
The applicant proposes to use the micro loan funds to purchase equipment necessary to
initiate production and sales of the boats. The company has financing commitments for
equity investment and a bank line of credit. In addition, the company has submitted an
application for financing from the Initiative Foundation. The sources and uses of the
project are as follows:
Bank Line of Credit $100,000 Working Capital
Private Equity $ 80,000 Working Capital
Initiative Foundation $ 75,000 Working Capital
EDA Loan $ 50,000 Equipment
Total Project $305,000
The applicant has proposed that the EDA take a first position on the equipment. The
preliminary equipment list is attached.
• The applicant proposes to create 7 to 12 full-time jobs within the first two-years of the
project. Proposed wages are not less than $17.00 per hour.
Lake Assault Custom Boats-Micro Loan Fund Application
Finance Committee—March 4,2003
Page 2 of 2
• In addition to the financial criteria that must be considered, the committee must also
consider to what degree the applicant satisfies the criteria set forth in the attached Micro
Loan Fund policies.
Micro Loan Criteria Lake Assault Custom Boats
* Max. Loan Amount: $50,000 *Amount requested: $50,000
* Interest Rate: 1 below prime * Rate requested: 1 below prime
* 1 job created per $20,000 loaned * 1 job created per $4,167 loaned
* Min. average wage of$8 per hour *Average wage of$18 per hour
As in past Micro Loan meetings, the applicant will be given an opportunity to present the
project and application. Following the presentation the Finance Committee may ask
questions of the applicant. The applicant will then be excused from the meeting, allowing
the committee to discuss the application and determine a recommendation for EDA Board
consideration.
Attachments
• City of Elk River Micro Loan Fund Policy
• Application—Lake Assault Custom Boats
• Business Plan
• Financial Projections
• Preliminary Equipment List
• Personal Financial Statement of Owner
GL/Lbi LC1E1. PELSTRING CAPITAL CO PAGE 02
• ELK RIVER ECONOMIC DEVELOPMENT
MICRO OAN FUND APPLICATION
I. CONTACT INF •RMATION
Company: Jake As atilt Custom Boats
Address: 1928 1,3 °` Avenue North
City/ State/Zip: Blaine, 55429
Contact Person(s) Jerry At -rton
Business Phone (612) 849 6655 Fax (763) 754-6475
Home Phone 763 754 ►624
Email jerryalakeassault.co
Check One: roprietor X Corporation Partnership
Social Security No. 277 52 2r 83
• Federal ID # 71-0930959 State ID #
IL NATURE OF L 1►AN REQUEST
Which Micro-Loan Program ar you applying for?
(/t- X Supplemental F nancing Program
Redevelopment Financing Program
T Industrial Incen 've Program
Amount Requested: $ 50,004 Total Project Cost: $ 305.000
Type of project:
New construoti.n for a start up business.
New constructi n for an existing business.
On site expansi ii n
X Equipment pur•, ase
Remodeling: (c cle one) Commercial/Retail/Industrial
Other
Please give a brief summary if you business and its products or service: Lake
Assault Custom Boats Inc, a s all lot custom boat manufacturer catering to a small niche
• of up scale fishermen in the Mi west. It is modeled after a similar industry that has been
02/26/2003 10:59 7637924236 PELSTRING CAPITAL CO PAGE 03
. in place in the Northwest Unit• States for over 30 years. While that market is saturated
in that area, it is a market that .s never been exploited here in the Midwest.
Please give a brief summary o ! e project:
Lake Assault has committed to I ease 7,500 sf of the Decker building in Elk River to
initiate its operations. The fund: will be used, in conjunction with the equity investment,
bank line of credit, and Central it 1 Initiative Funding to initiate production and sales of
the boats. The entire operation ill be located in Elk River, MN
Please describe how this loan ill impact your project:
The local funding is critical for the start-up of operations and will enable the company to
initiate hiring its first three em:loyees.
III. FINANCING
iroiect Costs
Land111111 $
Site improvements
Buildings (attach plans costs) $
Equipment/Machinery ixtures $ 50,000
(attach list and estimates costs)
Remodeling $
Industrial Inventory/W:rking Capital $ 255,000
Other (attach descriptio, ) $
Total Costs $ 305,000
Comments:
' I
•
02/26/2003 10: 59 7637924236 PELSTRING CAPITAL CO PAGE 04
• Pr• if in:n i
SOURCE AME TERMS AMOUNT
Bank Loan : =nk LO 7 years $ 100,000
Bank Loan $
Other Private Funds •entral MN Fo ndation- 7 years S 75,000
Applicant Contribution
Other 'vate E.uit S 80,000
Fed Grant/Loan $
State Grant/Loan $
EDA Micro Loan k Riv-r RLF 10 years $ 50.000
• Total Financing S 305,900
Comments:
Collateral Assignments
Lien
De ri•tionofCollat-r:_ Position
To Bank 1 Invent & A/R 1
st
To Bank 2
To Private Sources E ipmfnt/Inventorv/A/R 2nd
To Federal Govt
To State
To EDA Micro Loan quipment 1
Comments:
02/26/2003 10: 59 7637924236 PELSTRING CAPITAL CO PAGE 05
• Value of Collateral j
Existing
•ook Value Liens
Land $ $
Buildings $ $
Machinery & Equip. 50.000 $50,000 $ 0
Other $ $
Other $ $
Comments:
W. JOB & WAGE ' OALS
Present#of Employee. 0 Total Payroll 0
• Jobs To Be Created*
Please •rovide the f•i lowin_ information on -obs ou ex• - t to create.
Average Are the Jobs
Number of Hourly Annual Permanent or Expected
Job Title Jobs ' Salary Salary Temporary? Hiring Date
Management _ 1 28.85 55,392 Permanent _ 3/31/03
Administrative 2 17.31 33,235 Permanent 3/03-12/03
Machinists 1-3 ! 18.00 36,000 Permanent 3/03-12/03
Welders 3-6 18,00 36,000 Permanent 3/03-12/03
*If loan is for job rete ion only, please explain in Business Plan.
Job Creation Timetable
Please indicate on the table be ow when individual jobs will be added to the firm-
Number I r. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. 1
Job Title of Jobs 2 3 4 5 6 7 8 I
Management 1 0 0 0 0 0 0 0
Administrative 2 1 1 0 1 0 0 0 0
Machinists 3 + 1 0 0 0 1 1. 0
Welders 6 0 1 1 0 1 1 1
02/26/2003 10:59 7637924236 PELSTRING CAPITAL CO PAGE 06
• V. PROJECT C NTACTS
Attorney
Name -v. Otto 'OTSCH& 0 T• P.A.
Address 3116 F• /_i . A N ST, PAUL MN 55113
Phone 651 636 1076
Accountant
Name Paul J. Trend& bartered
Address 7301 Ohms La Suite 450 Edina, MN 55439-2339
Phone (952) 897-0095
Financing Sources (tenders, artners, etc...)
Name M: I Bank-John A. . a _i Y VP Business B. .._.ins
Address 3500 129th Avenue ' , Coon Rapids, MN 55448
Phone 763-433-3301
Name
Address
Phone
Name
• Address
Phone
Name
Address
Phone
Parent Como. y
Name
Address
Phone
Others
Name
Address
Phone
Name
Address
Phone
•
02/26/2003 10:59 7637924236 PELSTRING CAPITAL CO PAGE 07
• VI. ATTCHMENT CHECK LIST
Please attach the following:
X A) Written Busi ess Plan:
1. Des. 'ption of Business
2. a ship
3. Man,gement
4. Date Established
5. Prod cts/Services
6. Futu e Plans
B)Financial St: ements for Past Two Years
X C) Financial Pr.jections for Past Two Years
X D) Resume of •wrier/Management
X E)Personal Fin ncial Statements of Proprietor, Partners,
Guarantors
F)Letter of Co mitment from Applicant Pledging to Complete
• During the ' •posed Project Duration
G) Letter of Co mitment from the Other Sources of Financing,
Stating Ter 's and Conditions of their Participation in
Project
H) Other
I Other
X J)Fee (1% of aount of loan request)
02/26/2003 10:59 7637924236 PELSTRING CAPITAL CO PAGE 03
VII. AGREEMENT
I/ We certify that all information provided in this application is true and correct to the
best of my/our knowledge. 1,"We authorize the City of Elk River and the Finance
Committee to check credit rerfe-ences 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.
DATE 2-25-03
APPLICANT NAME Lake Assault Boats,Inc
BY
O
111
\I"Ilt
City of
Elk
Economic Development
Micro Loan Fund Policy & Guidelines
And Application
Revised: September 1999
City of Elk River Economic Development Authority
13065 Orono Parkway,P.O.Box 490
Elk River,MN 55330
(763) 441-7420
ELK RIVER ECONOMIC DEVELOPMENT
MICRO LOAN FUND POLICY & GUIDELINES
• Revised September 1999
PURPOSE
The Economic Development Authority for the City of Elk River (EDA) recognizes
the need to stimulate private sector investment into manufacturing facilities and
equipment in order to create new jobs,boost productivity and retain existing jobs for
local residents. Additionally, the need exists to encourage investment in the
expansion and/or rehabilitation of commercial and retail buildings in order to
maintain the economic viability of Elk River's central business district.
Subsequently, the purpose of this program is to provide low interest,long-term (i.e.
greater than one year) loans as incentives for industrial development within the City
of Elk River and to encourage commercial and retail business owners in the central
business district to rehabilitate their existing buildings.
II. LOAN PROGRAMS
In order to meet the economic and community development objectives of the EDA,
three distinct loan programs exist within the Micro Loan Fund to promote business
growth in Elk River.
Supplemental Financing Program
• Purpose: The Supplemental Financing Program is designed for industrial firms
who have maximized their conventional financing and equity
resources and subsequently would be unable to complete a project
without EDA assistance.
Amount: Up to $50,000
Equity: Must match EDA loan with 1:1 ratio. Total loans not to
exceed 90% of project value.
Rate: Fixed; 1 point below the lowest prime rate published in
the Wall Street Journal the day the loan is closed.
Term: Financing up to 3-years. Loans may be amortized up to
15-years with a balloon payment.
Refinancing: The loan may be refinanced up to 2 additional years at a
market rate of interest.
Criteria: 1. Borrower must create one new full-time job for each $20,000 loaned
within two years. Said jobs must pay a minimum average wage of$8
per hour plus benefits.
• 2. Borrower must be an industrial firm and comply with the provisions
of the city's industrial and business park zoning ordinances.
Elk River Economic Development Authority
Micro Loan Fund Policy&Guidelines Page 2 of 8
Redevelopment Financing Program
• Purpose: The Redevelopment Financing Program is available to business and
property owners in the central business district (CBD) for the
rehabilitation and restoration of their buildings.
Amount: Up to $50,000
Equity: Must match EDA loan with 1:1 ratio. Total loans not to
exceed 90% of project value.
Rate: Fixed; 2 points below the lowest prime rate published in
the Wall Street Journal the day the loan is closed.
Term: Financing up to 3-years. Loans may be amortized up to
15-years with a balloon payment.
Refinancing: The loan may be refinanced up to 2 additional years at a
market rate of interest.
Criteria: 1.At a minimum,20% of Micro Loan dollars must be used
for the improvement of the building's facade.
2. Borrower must be located in the Central Business
District (see attached map).
•
Industrial Incentive Program
Purpose: The purpose of the Industrial Incentive Program is to encourage
industrial development that supports the tax base and brings quality
jobs to the city.
Amount: Up to $100,000
Equity: Must match EDA loan with a 3:1 ratio. Total loans not to
exceed 90% of project value.
Rate: Fixed;4 points below the lowest prime rate published in
the Wall Street Journal the day the loan is closed.
Term: Financing up to 5 years. Loans may be amortized up to
15-years with a balloon payment.
Refinancing: The loan may be refinanced up to 2 additional years at a
market rate of interest.
Criteria: 1. Borrower must be an industrial firm and create one new
full-time job for each $20,000 loaned within 2 years. Said jobs must
pay a minimum average wage of$10 per hour plus benefits.
Elk River Economic Development Authority
Micro Loan Fund Policy&Guidelines Page 3 of 8
2. Borrower must locate in the West Business Park (see attached map)
and comply with the provisions of the city's industrial and business
• park zoning ordinances.
III. USES
1. Permitted Fund Uses:
a. Building construction
b. Land acquisition
c. Machinery
d. Furniture, fixtures, and equipment (FF&E)
e. Renovation and modernization of buildings
f. Exterior renovation of retail, commercial and industrial buildings
g. Public infrastructure needed for economic development expansions
2. Ineligible Fund Uses:
a. Expenditures for the construction and/or renovation of residential units
b. Working capital
c. Refinancing of existing debt
d. Inventory
IV. BUSINESSES ELIGIBILITY
Any project meeting the above criteria, and located or proposed to be located within
• the city limits of Elk River as defined by this program,may be eligible for an
Economic Development Micro Loan as further defined herein:
• Business must be a for-profit corporation,partnership, or sole
proprietorship.
• Business must be a small business as defined by the Small Business
Administration (SBA).
• Business must have a positive net worth.
• Religious, political, and pornographic enterprises are not eligible to use
the Economic Development Micro Loan Fund.
V. MICRO LOAN FUND TERMS & CONDITIONS
1. Loan Structure
All EDA Micro Loans will be structured as participation loans and will be serviced by
the project's primary lending institution. Such an arrangement allows for the central
distribution and collection of funds and simplifies the financing process for all
parties involved. A participation agreement will be signed by the borrower, primary
lender and the EDA.
2. Simultaneous Micro Loans
The simultaneous use of different Micro Loan Fund Programs by any one borrower
or for any one project is prohibited.
•
Elk River Economic Development Authority
Micro Loan Fund Policy&Guidelines Page 4 of 8
3. Call of Loan
A loan shall become due and payable in full if a business relocates outside of the city
• of Elk River prior to the maturity date of the EDA loan.
VI. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS
All buildings within which public funds will be used for construction or renovation
are to be brought into conformance with city codes and policies. Repairs may
include the following systems and portions of real property:
a. Mechanical heating,plumbing, and electrical
b. Structural;including the facade of the structure and energy related
improvements.
VII. LOAN SECURITY AND GUARANTEES
Applicant must be able to secure the loan by providing the EDA with a minimum of
a subordinate mortgage upon the building and/or assets or other approved collateral.
Applicant must demonstrate the financial means to repay the loans, as determined by
the Economic Development Authority.
Whenever possible,personal guarantees will be made part of any loan agreement.
VIII. TIMING OF PROJECT EXPENSES
• No project should commence until the Elk River Economic Development Authority
has approved the loan application. Any costs incurred prior to the approval of the
loan application are generally not eligible expenditures.
No building construction should commence until the required City permits are
secured.
The applicant will be responsible for all legal, recording, and other fees required for
protection of a security interest in the loan.
IX. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL
1. All applicants shall first contact a primary lending institution to determine if
additional equity is needed, and if so,how much.
2. The applicant and the primary lender shall then meet with City Staff to obtain
information about the Micro Loan program, discuss the project, and obtain
application forms.
3. The applicant shall complete and submit an application form to the City, along
with a processing fee of 1% of the loan request. (The fee is used to cover
processing expenses and will be returned if application is denied.) The applicant
• must provide evidence of their ability to meet the equity requirements or provide
a letter of commitment for conventional financing from the primary lending
institution.
Elk River Economic Development Authority
Micro Loan Fund Policy&Guidelines Page 5 of 8
4. The application will be reviewed by the City staff to determine if it conforms to
. all City policies and ordinances and to consider the following:
a. The availability and applicability of other governmental grants and/or
loan programs.
b. Whether the proposed project will result in conformance with building
and zoning codes.
c. Whether it is desirous and in the best interests of the public to provide
funding for the project.
5. The EDA Finance Committee and EDA Commissioners will review each
application in terms of its consistency with the goals of the Growth
Management, Strategic, and Economic Development Plans and in relation to the
project's overall impact on the community's economy. Redevelopment Loan
applications will also be reviewed by an HRA member in conjunction with the
EDA Finance Committee.
They will also evaluate the project application in terms of the following:
a. Project Design- Evaluation of project design will include
review of proposed activities, time lines and a capacity to implement.
b. Financial Feasibility -Availability of funds, private involvement, financial
packaging and cost effectiveness.
• • Appropriate ratio of private funds to Micro Loan funds.
• Sufficient cash flow to cover proposed debt service as
demonstrated by financial statements and projections.
• Business must show a positive net worth.
• Letter of Commitment from applicant pledging to complete the
project during proposed project duration,if the loan application
is approved.
• Letter of Commitment from other financing sources stating
terms and conditions of their participation in the project if
applicable.
• Sufficient collateral.
c. All other information as required in the application and/or additional
information as may be requested by the Economic Development
Authority.
d. Project compliance with all city codes and policies.
Elk River Economic Development Authority
Micro Loan Fund Policy&Guidelines Page 6 of 8
e. Program Objectives - In addition to job and wage requirements, the
applicant must meet all Micro Loan Fund criteria and demonstrate how
• the proposed activities will meet at least one of the following objectives:
• The project contributes to the fulfillment of the city's approved
and adopted economic development and/or redevelopment
plans.
• The project prevents or eliminates slums and blight.
• The project increases the local tax base.
• The project brings a structure into compliance with an existing
building code violation.
6. The EDA Finance Committee will recommend the approval, denial, or request a
resubmission. A recommendation from the Finance Committee will be
forwarded to the EDA for final action.
X. LOAN POLICY REVIEW
The above criteria will be reviewed on an annual basis to ensure that the policies
reflected in this document are consistent with the economic development goals set
forth by the City.
XI. COMPLIANCE WITH STATE STATUTES
Each company receiving assistance in excess of$25,000 from the EDA Micro Loan
Fund shall be subject to the provisions and requirements set forth by Minnesota
State Statute 1161993 and summarized below.
Progress Reports
borrower shall file a report after the closing for two years of the loan or
until all goals set forth in the application have been meet,which ever is later. Reports
shall be completed using the format drafted by the State of Minnesota and shall be
filed with the City no later than March 1 of each year for the previous year.
Businesses fulfilling job creation requirements must file a report with the city no later
than 30 days after the deadline.
Maintain Facility
The borrower agrees to maintain and operate its facility at the site where the loan is
used for a period of five years after the date the loan is closed.
Goal Attainment
In addition to attaining or exceeding the jobs and wages goals set forth in Section IV
of the Application, the borrower agrees to achieve at least one of the goals for
community development set forth in Section IX,part 5, subdivision (e) of the Micro
Loan Fund policy.
Elk River Economic Development Authority
Micro Loan Fund Policy&Guidelines Page 7 of 8
Redevelopment loans in the central business district are exempt from job creation and
wage goals stated in Section IX,part 5, subdivision (e) provided the loan amount does
• not exceed 50% of the project cost.
Failure to Comply
Businesses failing to comply with the above provisions will be subject to fines,
repayment requirements, and be deemed ineligible by the State to receive any loans
or grants from public entities for a period of five years.
XII. RIGHT OF REFUSAL
The Elk River Economic Development Authority may deny any project which it
deems inappropriate according to the guidelines established in this document.
411
Elk River Economic Development Authority
Micro Loan Fund Policy&Guidelines Page 8 of 8