4.0. EDSR 07-08-1996 ITEM 4
ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
11,
MEMORANDUM
TO: Economic Development Authority
ROM: Paul T. Steinman, Director of
Economic Development
DATE: July 8, 1996
SUBJECT: LeFebvre Trucking Micro Loan Request
Introduction
On July 1, 1996, the EDA Finance Committee met and discussed the
LeFebvre Trucking micro loan request of$50,000. Such a request is to fund
working capital as part of their project to construct approximately 16,300
square feet of shop/office space.
ID
Two of the four members present at the EDA Finance Committee meeting
voted in favor of approving the loan request. The other two members present
abstained due to their association as employees of the applicant's bank.
Background
Attached for your review is a packet of information including the following
items:
• Letter from First National Bank regarding financing for the project
• Letter from LeFebvre Companies and loan fund application
The terms of the loan would be as follows, based upon review and
recommendation of the EDA Finance Committee:
• $50,000 principal
• 5 year term
• Interest rate equal to prime rate and adjustable semi-annually based
upon fluctuations in the prime rate
410
P.O.Box 490 • 13065 Orono Parkway • Elk River, MN 55330-1743 • (612) 441-7420 • Fax: (612) 441-7425.
Equal Opportunity Housing and Equal Opportunity Employment
• Collateralized with a second mortgage position on the land and buildings,
ipor if that appears to be unworkable, loan security would be in the form of
leans on unencumbered equipment or accounts receivable
Staff has asked for and received additional information from the applicant
with regard to their anticipated total working capital needs. As indicated on
pg. 2 of the application, their total working capital needs are reflective of
their $700,000 line of credit. Their request for a $50,000 working capital
loan, as a percentage of their total working capital needs, meets the micro
loan fund policy guidelines.
Financing
Project use of funds as identified in the application are as follows:
• Land $100,000
• Buildings 742,000
• Equipment/Machinery 20,000
• Working Capital 50,000
Total $912,000
mak Project source of funds as identified in the application are as follows:
• Bank Loan First National Bank $740,000
• EDA Micro Loan 50,000
• Owner Equity Contribution 122,000
Action Requested
Staff is recommending that the EDA approve the $50,000 loan request from
the LeFebvre Companies.
• s:\eda\lefebmin.doc
i MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT
AUTHORITY FINANCE COMMITTEE
HELD AT ELK RIVER CITY HALL
MONDAY, JULY 1, 1996
Members Present: Jim Simpson, Lloyd Brutlag, Bud Houlton, Tom
McNair
Members Absent: Tom Bender
Staff Present: Paul Steinman, Director of Economic Development
and Lori Johnson, Finance Director
The purpose of the EDA Finance Committee meeting was to review a $50,000
micro loan request from LeFebvre Trucking. Paul LeFebvre, president, was
present to provide an overview of this loan request. Staff requested that
additional information be provided on the business's total working capital
needs. The micro loan fund guidelines indicate that the total amount of a
working capital loan from this fund can be no more than 25% of a business's
total working capital needs.
• It was determined, after further discussion, that an appraisal would be
completed on the land by First National Bank as the primary lender on this
project. It was also discussed that the interest rate on this loan should be at
prime rate, and adjusted every six months after closing, if there is a variation
in the prime rate. It was also discussed that the first priority for securing
this loan should be to obtain a second mortgage position on the land and
buildings, and if that is not achievable, that equipment or accounts
receivable would be used to collateralize this loan.
JIM SIMPSON MOVED APPROVAL OF THE LEFEBVRE $50,000
LOAN REQUEST AND THAT SECURITY FOR SUCH LOAN SHOULD
BE IN THE FORM OF A SECOND MORTGAGE POSITION ON THE
BUILDINGS AND LAND,AND THAT THE INTEREST RATE ON THE
LOAN WOULD BE PRIME RATE,ADJUSTABLE EVERY SIX
MONTHS AFTER CLOSING. LLOYD BRUTLAG SECONDED
MOTION. THE VOTE WAS AS FOLLOWS:
JIM SIMPSON AYE
LLOYD BRUTLAG AYE
BUD HOULTON ABSTAINED (Due to association with First Nat'l Bank)
TOM MCNAIR ABSTAINED (Due to association with First Nat's Bank)
41111
s:\eda\meetings\Snanmin.doc
111 FirstNational k
• of Elk River
June 28, 1996
Anoka Office
1121 W Hwy.10
Anoka,MN 55303
(612)422-0537 Ms. Lori Zieme•
13065 Orono Pi:rkway
Elk River, MN.i5330
Elk Park ce ter odic. FAX# (612) 441-7425
19157?seeped Ave
Elk Rivet MN 55330
(612)441-5684 ATTN: EDA Fl IJANCE COMMITTEE
MICR(I.LOAN FUND
•MiOmc Dear Committo; Members:
729 Main sues
Elk Rivet.MN 55330
(612)441.2200 First National B ink of Elk River has tentatively approved a loanfor LeFebvre
Companies, Inc.,to assist them in constructing a new corporate facility in Elk
. River. This prc.ject will include 11,800 square feet of shop space and.4,500
square feet of of lice space. Our Bank anticipates providing a commercial real
S XO ce estate mortgage of approximately$740,000 for this project.
19424 Evans St NW
Elk Rivet.MN 55330
(612)441-2447 Final approval :by our Bank will require receipt and analysis of the
corporations fisi;al year end reviewed financial statement(4-30-96), property
survey along with final plans and specifications necessary to obtain an
appraisal, and :nortgagees Title Insurance policy issued to the Bank, which
26040Zimmer
man ee s shall insure tha::the Bank's mortgage is a valid first lien on the real estate.
Zimtnsemaa MN 55398
(612)856.2266 LeFcbvre Com panies, Inc. has experienced substantial growth over the past
four(4)years, lith total revenue increasing from$3.8 million to $7.2 million.
This type of gre wth requires increasing amounts of working capital. LeFebvre
Companies, Inc :anticipates that their growth will continue and have concluded
First NationalMortgage
76 Main Street that the coto)ate office space and shop facilitymust expand. Increasing
River,MN 55330 investment in fi ced assets of land and building places an additional demand on
12)441-7133
liquidity.
• Conventional fi isancing will be maximized in order to assist LeFebvre
Companies, Inc..with their building expansion. Without the supplemental
financing from the Micro Loan Fund, the project may not be undertaken
because of the s:rain on working capital.
Our Bank has ex perienced an excellent relationship with LeFebvre Companies,
Inc. for many ye in. This company has had a long term presence in Elk River,
dating back to 1961 when LeFebvre and Sons, Inc. was formed. We request
that the Micro Loan Fund be utilized to provide the necessary GAP funding
to allow this co:iipany to grow in Elk River.
Sincerely,
•
THOMAS J. M�'1`iAIR
Sr.. Vice Preside:nt
TJM:mkt
•
•
LeFelivre
LeFebvre Companies
Companies Phone:612445-8157
Fps:ax:61Y-33j-8368
•
Thursday,June 27, 1996
City of Elk River-EDA-Finance Committee
We at LeFebvre Companies, Inc. wish to thank you for taking the time to review
our application for your Micro Loan Fund. As you will see in the plans and application
we are in the process of building a new truck shop and corporate headquarters in Elk
River.
While in this process we are asking for your assistance from your Fund. We are
requesting$50,000 as working capital. We do not wish to use our available cash for
utilities hook up and unexpected office and shop expenditures, because of the growth we
have experienced in the last four years and our projected growth.
• We understand that the money will be paid back during a five year period. Our
accompanying financial projections have this loan and the new bank mortgage for the
building and also the projected real estate taxes included.
esp ctfully
Paul LeFebvre
President
•
ECONOMIC DEVELOPMENT MICRO LOAN FUND
ELK RIVER, MINNESOTA
APPLICATION
APPLICANT LeFebvre Companies , Inc.
410
ADDRESS 7700 Highway 101
CITY Shakopee STATE MN ZIP CODE 55379
CONTACT PERSON(S) Paul LeFebvre
BUSINESS PHONE (612 )445-8157 HOME PHONE (612 )441-3982
AMOUNT REQUESTED $50,000.00
TERMS REQUESTED 5 Years
SOCIAL SECURITY NUMBER 475-64-0390 FED ID # 41-1783497
STATE ID # 1940887
1 . Type of Project:
„__Construction/New Building Expansion/Existing
Building
Equipment/Machinery Purchase Remodel/Commercial
Retail/Industrial
• Industrial Inventory Working Capital
Other
2 . Describe Project:
New 11 , 800 Square Feet maintenance, wash, and truck storage
facility with 4, 500 Square Feet of office space attached for
corporate facilities. The building will be concrete tip up
wall panels.
3 . Purpose of Loan:
To be used as back up working capital for incedentals that
seem to crop up in any type of project: utilities, office
• supplies , shop supplies , etc. . .
Tot( (.n4,1_1 „:44 1706, bve,
p.v4W At-e ta-04-1€
4 . Cost of Project:
A) Land $ 100,000
B) Buildings (attach plans & costs) $ 742 ,000
C) Equipment/Machinery/Fixtures (attach list
and estimated costs) $ 20,000
D) Remodeling $ 0
• E) Industrial Inventory/Working Capital $ 50,000
F) Other (attach description) $ 0
TOTAL COSTS $ 912 ,000
5 . Proposed Financing:
SOURCE NAME TERMS AMOUNT
A) Bank Loan 1st National 20 Years $ 740,000
Bank of Elk
B) Bank Loan River $
C) Other Private Funds $
D) Applicant Contribution $ 122 ,000
E) Other $
F) Fed Grant/Loan $
G) State Grant/Loan $
• H) This Loan EDA 5 Years $ 50, 000
TOTAL FINANCING $ 912, 000
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6 . Collateral to be assigned (Describe and show lien position) :
A) To Bank: Building & Land
B) To Bank:
C) To Private Funding Source:
411 D) To Other Source:
E) To Federal Govt:
F) To State:
G) To This Loan: Accounts Receivable
7 . Value of Collateral:
COST BOOK VALUE EXISTING
LIENS
A) Land $ 43 , 750 $ 120,000 $ 0
B) Buildings $ 742 , 000 $ 742 ,000 $ 0
C) Mach. & Equip. $ 0 $ 0 $ 0
D) Other $ $ $
E) Other $ $ $
8 . Employment*:
•
. Present: # of Employees 61 Total Payroll 1 , 270, 578
After Project: # of Employees 63 Total Payroll 1 , 306,978
*If Loan is for Job Retention Only, Explain in Business Plan.
9 . Attorney, Accountant (Names, addresses, phone) :
Carroll & Leighton 338-8911 Cummings, Keegan & Co. 922-3622
100 S. Fifth St. , Suite 2250 6800 France Ave. S.
Minneapolis, MN 55402-1221 Minneapolis, MN 55435
10 . Bank and Other Credit References (Names, addresses, phone) :
1st National Bank of Elk River 729 Main Street Elk River, MN 55330
441-2200
Cargill Leasing 6000 Clearwater Drive Minnetonka, MN 55343 984-3591
Paccar Financial 17615 25th Ave N. Plymouth, MN 55447 476-9630
Rihm Motors 2108 University Ave. St . Paul , MN 55114 646-7833
•
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11 . Attach and include the following:
X A) Written Business Plan:
1 . Description of Business
2. Ownership
3 . Management
411 4 . Date established
5. Products/Services
6 . Future Plans
X B) Financial Statements for past two years
X C) Financial Projections for two years
X D) Resume of Owner/Management
X E) Personal Financial Statements of proprietor, partners,
guarantors
F) Letter of commitment from applicant pledging to complete
during the proposed project duration
X G) Letter of commitment from the other sources of financing,
stating terms and conditions of their participation in
project
H) Other
• I) Other
X J) Fee ( 1% of amount of loan request)
•
•
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•
• 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 )L.L.c.
077 /f9 nApplicat Name /.e.-Fe-byre.
/ �
By .c_... � . i •
By
S .
•
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Written Business Plan
• The history of LeFebvre Companies, Inc. began back in 1940 when Noel LeFebvre started
transporting livestock and milk from the Elk River area. Throughout the years,Noel's business
continued to grow and expand with hard work and dedicated service to his customers. As Noel's
sons got older, all four: Leon, Gene,Eddie and John became involved in the operation.
In 1961,LeFebvre& Sons, Inc. was formed and incorporated. Wanting to simplify their
operation and expand its potential,the LeFebvres'decided to focus their attention on Elk River
Concrete Products and become its primary carrier. Today,this relationship involves the third
generation of ownership in both companies.
LeFebvres'have continued to grow and prosper and have become a nationally known concern in
the movement of pre-formed concrete products throughout the Central United States. In May
1994,LeFebvre Companies, Inc. was formed and incorporated as the holding company.
LeFebvre& Sons,Pipe Transit,Pipe Transit of Ohio,LeFebvre& Sons of Wisconsin, and
LeFebvre& Sons of Iowa are now divisions of LeFebvre Companies, Inc. Three of Leon's sons,
Paul, Chuck and John,are currently equal owners in these operations.
The acquisition of highly specialized equipment has allowed them to maintain an edge in the
operational side of the industry, while the extraordinary level of service and dedication has made
LeFebvre Companies,Inc. a leader in a highly competitive market. Their customer loyalty is a
result of the hard work and dedication of every employee and contractor in the organization.
• The future looks promising for the LeFebvres'. They have plans to expand the new Iowa
operation,and they are confident in their potential to grow and prosper. They know the key to
success and intend to continue their efforts,to expand their horizons and stability in the future,
by utilizing the same theories and style that have brought them where they are today.
•