6.2 EDSR 04-18-2016
Request for Action
ToItem Numbe
r
Economic Development Authority 6.2
Agenda SectionMeeting DatePrepared by
General BusinessApril 18, 2016Amanda Othoudt, EDD
Item DescriptionReviewed by
Satisfaction Agreement for Preferred Powder Cal Portner, City Administrator
Reviewed by
Coating, Inc.
Action Requested
Approve, by motion, a resolution and a certificate of forgiveness for Preferred Powder Coating, Inc.
Background/Discussion
The EDA passed the Forgivable Loan guidelines in February of 2013. The program was designed to
stimulate private sector investment, help spur new construction,
opportunities, and promote the sale of city-owned property.
Preferred Powder received a $200,000 forgivable loan to assist with the cost of constructing a 100,000
square foot facility in the city-owned NatureÔs Edge Business Center. The City Council formally
approved the request on May 6, 2013, with the project commencing on September 26, 2013.
As part of the Loan Agreement, Preferred Powder was required to create eight full-time jobs with five of
the eight jobs awarded to low to moderate income individuals. Preferred Powder was also required to
retain these jobs for a minimum of one year. Upon completion of all the goals and requirements set forth
by the Forgivable Loan policy, the loan would be forgiven.
Preferred Powder Coating has since met these goals and has forma
Agreement by the EDA.
Financial Impact
N/A
Attachments
Letter of Request for Loan Forgiveness from PPC (April 14, 2016)
Resolution
Certificate of Forgiveness
Release of Mortgage
UCC Termination
Forgivable Loan Program Ï Loan Agreement
Promissory Note
Mortgage & Security Agreement
ECONOMIC DEVELOPMENT AUTHORITY OF
THE CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 16-02
RESOLUTION APPROVING ISSUANCE OF A CERTIFICATE OF FORGIVENESS AND
RELEASE OR MORTGAGE
WHEREAS, Preferred Powder Coating, LLC (the “Borrower”) has heretofore entered into
a Loan Agreement, dated September 26, 2013, by and between the Economic Development
Authority of the City of Elk River (“EDA”) and the Borrower (the “Loan Agreement”); and
WHEREAS, in accordance with Section 6 of the Loan Agreement the Borrower has
notified the EDA that all conditions have been met for the loan to be forgiven and has requested
that the EDA issue a Certificate of Forgiveness and Release of Mortgage.
NOW THEREFORE BE IT RESOLVED By the Board of Commissioners (the “Board”) of
the Economic Development Authority of the City of Elk River (“EDA”) as follows:
Section 1. EDA Approval. The EDA hereby finds that conditions have been met for the
loan to be forgiven, and the President and the Executive Director are hereby authorized and directed
to execute the Certificate of Forgiveness and Release of Mortgage, together with any related
documents necessary in connection therewith (the “Release Documents”), on behalf of the EDA and
deliver the Note, the Entity Guaranty and the Personal Guaranties (as defined in the Loan
Agreement) to the Borrower. The approval hereby given to the Release Documents includes
approval of such additional details therein as may be necessary and appropriate and such
modifications thereof, deletions therefrom and additions thereto including without limitation filling
in any missing information, as may be necessary and appropriate and approved by legal counsel to
the EDA and by the officers authorized herein to execute said documents prior to their execution;
and said officers are hereby authorized to approve said changes on behalf of the EDA. The
execution of any instrument by the appropriate officers of the EDA herein authorized shall be
conclusive evidence of the approval of such document in accordance with the terms hereof.
Approved by the Board of Commissioners of the Economic Development Authority of the
City of Elk River this 18th day of April, 2016.
President
ATTEST:
Secretary
478265v1 JSB EL185-22
CERTIFICATE OF FORGIVENESS
April ___, 2016
WHEREAS
, the Economic Development Authority of Elk River, Minnesota (the
“EDA”), a public body corporate and politic subdivision of the State of Minnesota and Preferred
Powder Coating, LLC, a Minnesota limited liability company (the “Borrower”) have entered into
a Loan Agreement dated September 26, 2013 (the “Loan Agreement”); and
WHEREAS,
the Loan Agreement requires the Borrower to meet certain conditions as set
forth in the Loan Agreement;
WHEREAS,
the Borrower has met the conditions set forth in the Loan Agreement to
forgive the loan;
NOW, THEREFORE,
this is to certify that the Borrower has met the conditions set
forth in the Loan Agreement to forgive the loan. As a result, the EDA shall forgive all
outstanding principal and interest due on the loan and relieve the Borrower of all further
obligations under the Loan Agreement and deliver to the Borrower the following:
(a)Promissory Note marked cancelled;
(b)the Personal Guaranties and the Entity Guaranty (as defined in the Loan Agreement)
to the Borrower;
(c)Release of Mortgage; and
(d)UCC Termination Statement (to be completed and filed in the Borrower’s discretion).
478227v1 JSB EL185-22
1
IN WITNESS WHEREOF,
the Economic Development Authority of Elk River,
Minnesota has caused this Certificate of Forgiveness to be executed with by its duly authorized
officer as of the date first written above.
ECONOMIC DEVELOPMENT
AUTHORITY OF ELK RIVER,
MINNESOTA
By
President
By
Executive Director
478227v1 JSB EL185-22
2
RELEASE OF MORTGAGE
Dated: April __, 2016
THAT MORTGAGE, SECURITY AGREEMENT AND FIXTURE FINANCING
STATEMENT dated ________, 2016 (the “Mortgage”), from Preferred Powder Coating, LLC, a
Minnesota limited liability company (the “Mortgagor”), in favor of the Economic Development
Authority of the City of Elk River, a public body corporate and politic of the State of Minnesota
(the “Mortgagee”), recorded in the office of the Recorder of Sherburne County, Minnesota, on
September __, 2013, as Document No. __________, is, for valuable consideration, terminated
and released in accordance with its terms.
(The remainder of this page is intentionally left blank.)
478254v1 JSB EL185-22
IN WITNESS WHEREOF, the undersigned has executed this Release of Mortgage as of
the date and year first written above.
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RIVER
By:
Its: President
By:
Its: Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ____ day of ____________,
2016, by __________________, the President and ________ the Executive Director of the City
of Economic Development Authority of the City of Elk River, on behalf of the public body
corporate and politic.
Notary Public
This Instrument was drafted by:
Kennedy & Graven, Chartered (JSB)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337-9300
478254v1 JSB EL185-22 S-1