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5.0. EDSR 03-13-2000 lir of MEMORANDUM 1kRiver.: EDA Finance Committee Members FROM: Marc Nevinski, Acting Director of Economic Development DATE: February 25, 2000 SUBJECT: Micro Loan Applications: Mark Rothfork, Ultra Image Powder Coating The EDA Finance Committee will meet Wednesday March 1, 2000 at 4:00 PM at Elk River City Hall to discuss the following: Issue Mark Rothfork, of Ultra Image Powder Coating, is requesting a Supplemental Micro Loan for $50,000 to be used for a 6000 square foot plant • expansion in the McChesney Industrial Park. The loan is proposed to be structured as participation loan with the First National Bank of Elk River. Background Mark Rothfork is the owner of Ultra Image Powder Coating, which began operations in 1994 and currently employs four people. Ultra Image provides contract painting services to metal manufacturing companies throughout central Minnesota. Mr. Rothfork currently owns a multi-tenant building in the McChesney Industrial Park, of which his company occupies 5000 square feet. Ultra Image also has a sister company located in Little Falls, MN. Mr. Rothfork is proposing a 6000 square foot expansion to his building to house an automated painting conveyor system. The expansion would create six to ten new jobs with wages of$9.50 per hour for laborers and $14.00 per hour for a production manager. The project is being financed through the First National Bank of Elk River at a three year fixed rate of 9.75% with a 20 year amortization. The sources of funds are as follows. First National $477,000 Owner Contribution $ 10,000 • EDA Loan $ 50,000 Total $537,000 13065 Orono Parkway • P.O. Box 490 • Elk River, MN 55330 • TDD &Phone: (612)441-7420 • Fax: (612) 441-7425 • The applicant has proposed that the EDA take a second position on the real estate mortgage. 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 Micro Loan Fund policies. Micro Loan Criteria Ultra Image Powder Coating • Max. Loan Amount: $50,000 • Amount requested: $50,000 • Interest rate: 1 below prime • Rate requested: 1 below prime • Equity to EDA loan ratio of 1:1 • Equity to EDA loan ratio of 9.5:1 • 1 job created per $20,000 loaned • 1 job created per $8333 loaned • Min. average wage of$8 per hour • Average wage of$10.00 per hour Attachments • Application • Business plan • 1997 & 1998 Balance Sheets • 1999 Financial Statements through September 30, 1999 • Cash Flow Projections 1999, 2000, & 2001 • Sworn Construction Statement • Letter of Commitment from First National Bank of Elk River • • Personal Financial Statements and 1998 Tax Return • 1998 Corporate Tax Return • Site plan 02/,14/00 11:52 Tr4417425 CITY/ELK RIVER Lgj010 a APPLICATION ECONOMIC DEVELOPMENT MICRO LOAN FUND • ELK RIVER, MINNESOTA I. CONTACT INFORMATION Company: l/l e/9 I/i �/ Rif l • Address: daC/S _���C City/State/Zip PI V 2- , MN//v - 53 3_30 Contact Person(s) Business Phone q ( I s2 8(, Fax q Home Phone 3 6ci —6/ 78 Email 4/K ( L)/tYc - Ma, e .LOM Check One: Proprietor Corporation Partnership Social Security No. (--( 17 —7 L— U 7S - Federal ID # State TT) # 111111.11111111111 IL NATURE OF LOAN REQUEST Which Micro-Loan Program are you applying for? X Supplemental Financing Program Redevelopment Financing Program Industrial Incentive Program Amount Requested: $ cO,, O" Total Project Cost; $ xQ • -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 /Retai.]./ Industrial Other Please give a brief summary of your business and its products or service: Uilia- /veto e Qo u)der COAT;1 ` S A (o fraLT- f V12 -F�Ai.Si/\.i n _ -SS Gl " Io o; d e 5 yak ►n $ejceS amtfcLe. Ait! Mit a //1107y-- (6e _57 B L).5 i e 53 6 ,J 1 / s� /17 -/ e j n/cocf a a- -c-' Jam . Isj (1 Please give a brief summary of the project: 7 Q £ Oa y 15 fat s S ,4- /1-0Y-0 ,AAcui-ea. • &Vd- i- Co AU `7)o2 Li , wi/,i d-Q O(1 R- 60•15/-7%-) _ ,+ 1 cc—e• 300, 0'O 3 atej 4±1 6 '6, o o a . ',4 c5s2 4-1y c SS*ems Please describe how this loan will yourproject: impact P Wi dir ,, o' i 7 '` i 4 3r o 0 ob 7/)i3 11R o3eCT Woad /(/OT- 105.5;la/ -*t= (.6/2- bp •(-/lA -s . - Qom/ D1/- t-> /0 Alor-e e�/lly/e e S- F NANC 71.4_, r o00 $ SF- 41 i``OA.) c i i l A 13e cui41 Total Project Costs `t,e., emAr /O( c s�fv J.�c�S 5 r Land $ Site improvements $ • Buildings (attach plans & costs) A-0 17r1 on $ c:97c:977/ 007O Q E quipment/Machinery/Fixtures (attach list and estimated costs) $ Remodeling $ Industrial Inventory/Working Capital $ O her (attach description) $ c9i - e 000 sTfitt/C Ly Total Costs `0 - -� $ .5137 Ve0 Comments: • ( ittAcUtJ' G 4 avL. . &t4411-tv , 1‘1- . , Q,- G6G t � Proposed Sources of Financing SOURCE NAME R1� AMOUNT • Bank Loan AJ�j-1 •4wK Gc1"Ut�a $ 4477 aoo. L K I v£` . Bank Loan $ Other Private Funds Applicant Contribution ' $ Aado• Other $- Fed Grant/Loan $ State Grant/Loan EDA Micro Loan $50/000' Total Project Financing $,..5437•���• Comments: • Collateral Assignments Lien Description of Collateral Position To Bank 1 1 REfiL "VIM Ls+ To Bank 2 To Private Sources To Other Sources To Federal Cov't To State To EDA Micro Loan,� -� i2 '\ a Comments: • u�/ 1Y/ Vu 11 JJ yYYi/Y4J x.111/L1-al\ ZS A.ILL% Value of Collateral Existing Book Value Cost Liens • Land r1_*y� $��C> O- $ _. . $$ as, 0.7Duxngry �9 Machine quip/4. $ $ Other $ $ $ Other Comments: IV. JOB &WAGE GOALS 1-7Present # of Employees / Total Payroll Jobs To Be Created* Please provide the following information on jobs you expect to create. Average Are the Jobs Expected Number Dourly Annual Permanent or Hiring Job Title of Jobs Wage Salary Temporary? Date 51-10 O L�48,z 9• SD /�e/.✓�a4 e,� 7—/-00 fdoo*.á1rs ► y.00 *If loan is for job retention only, please explain in Business Plan. Job Creation Timetable Please indicate on. the table below when individual jobs will be added to the firm. Number Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Job Title of Jobs 1 2 3 4 5 6 7 8 oriof tetiowg- . 3 I , i peod,,erkw pion Comments: 1(/".3.71-,4_ eovia reef f/ , e ! ..).5 It2LCt5 - 2 Sd,0 L a bar or 4/4/14/UU 11::JJ Le441/440 l.11l/LLLI Al VGA '+✓"+i IV. PROJECT CONTACTS Attorney • Name • Address Phone Accountant /� Name ii4)/ . ..ME-12_6---Sc) Address YO / 7 .� �D- l9-ve. kt yA//t4i2/e-- Phone #- 5-34v - `75'-:1.— i'inancin Sour enders (•a er. etc..- Nanae � �1 -I� ifio OFT C.- eGi2 Address 7 29 4/tif ✓Eit- Phone Name Address I Phone Name Address Phone • Name Address I Phone Name Address Phone Parent Company Name Address Phone Others Name Address Phone, Name Address I Phone I • 5 UZ/14/UU 11:DJ "p441144.7 1.111/Li.n "1 VLI% • V. ATTACHMENTS CHECK LIST Please• attach the following:✓ A) Written Business Plan, including: • Description of Business • Ownership • Management • Date Established • Products/Services • Future Plans B) Finance tatements for Past Two Years V Bofit & Loss Statement alance Sheet C) Current Financial Statements Profit & Loss Statement to Date Balance Sheet to Date D) Two Year Projections /E) Resume of Owner/Management F) Personal Financial Statements of all Major Shareholder /Profit & Loss ✓ _Current Tax Return C) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project Duration k4) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project I) Other J) Other K) Fee (1% of amount of loan request) Note: All Major shareholders will be required to sign personal guarantees. • 6 ,J.:(14/UU 11:3J -p-441!4La 1.111/LLA Xl VbK 4J 1� a- t 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. DATE GI U— 0 0 APPLICANT N ,1 724 < ; • BY /41/ 0110� BY 411111 7 4101 • First a lonal Ban Of Elk River Main Office: 729 Main Street Elk River,MN 55330-1595 612/441-2200 February 22, 2000 Mr. Mark Rothfork Ultra Image Powder Coating 18983 York St.NW, Ste. C Elk River, MN 55330 Dear Mark: Our Bank Loan Committee has approved and committed a loan request in the amount of $477,000 for an addition to your commercial building located at 18983 York Street, Elk River and also the refinancing of this building. The"gap financing" need of $50,000 will be submitted to EDA for their approval on their March 1, 2000 meeting. We welcome the opportunity to work with you as your Company continues to grow. Should you have any further questions, please feel free to contact me at (612) 241-3605. S�cerely, ire Ai/ Jan idde-Hooker Vice President JHH/kls • • • Branches in:Anoka,Elk River,Hassan,Monticello,and Zimmerman www.lnatbanker.com E Mail>fnber@lnatbanker.com MARK GORDON ROTHFORK 27789 BLUE LAKE DRIVE, N.W. ZIMMERMAN, MINNESOTA 55398 . TELEPHONE: (612) 389-8178 WORK EXPERIECE: 1994— PRESENT ULTRA IMAGE POWDER COATING, INC. ELK RIVER, MINNESOTA OWNER/ PRESIDENT. Ultra Image Powder Coating, Inc., is a metal finishing business doing contract painting on raw metal such as sporting equipment, cosmetic sheetmetal, store displays and agriculture trade. We employ 10 people in our facilities in Elk River, and Little Falls, MN. For more information please visit our website : www.ultra-image.com. 1992-1994 SEELYE CRAFTSMEN, INC PLYMOUTH, MINNESOTA WELDER/ PRECISION. Daily job duties were: weld projects made from mild/stainless steel or aluminum. Responsibilities included blueprint reading and holding close tolerances for parts being used in the food and medical fields. 1101 — 1992 CONVEYORS INCORPORATED EAGAN, MINNESOTA WELDER/ PROJECT ASSEMBLER. My tasks performed were: building conveyors for various types of applications using stainless steal tungsten inert gas, and shielded metal gas welding; To build custom built conveyor designs from 3-Dimensional Computer-aided Drafting Blueprints; Used miscellaneous shop equipment such as: brake press, metal sheer, iron • worker/punch press, and Automated Lazer Eye Design,cutting torch. 1991 LORAM MAINTENANCE OF WAY HAMEL, MINNESOTA WELDER/ PRODUCTION ASSEMBLER. Jobs included: Welding engine shrouds, control cabs, handrails, and catwalks. Conducted various overhead, horizontal and vertical welds to install parts to the railroad maintenance equipment, and used design blueprints by method of stick metal arc welding. 1990 — 1991 FORESTER BOATS SAUK RAPIDS, MINNESOTA ALUMINUM WELDER. Rolled aluminum sheets into pontoon tubes, wire welded the seam, brackets and heli-arced any needed repairs after • conducting air pressure soap tests. • Page 2 Mark Rothfork 1998 — 1990 BORGERT PRODUCTS INCORPOERATED ST. JOSEPH, MINNESOTA MECHANIC /WELDER. Various Welding duties included: Fabricating custom plant and equipment metal products; Used shielded and gas metal arc welders, along with oxy/acetylene torch; Plus various duties in mechanical work. 1985 — 1988 ACTIVE MILITARY DUTY FT. LEWIS, WASHINGTON SPECIALIST—4. POWDER GENERATION EQUIPMENT MECHANIC. Responsibilities included maintenance of equipment and supervision of lower ranking mechanics. ACHIEVEMENTS: Army Achievement Medal, 1988; Certificate of Achievement for Outstanding Professional Competence, 1986; and Award Mechanics Badge, 1987. EDUCATION: 4tRIL 1990 ST. 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