8.1. EDSR 04-16-2018 ��i
Eof
lk — - Request for Action
River
To Item Number
Economic Development Authori 8.1
Agenda Section Meeting Date Prepared by
Work Session Aril 16, 2018 Amanda Othoudt,EDD
Item Description Reviewed by
Business Incubator Program Cal Portner, City Administrator
Reviewed by
Action Requested
Discuss the proposed Business Incubation Program Policy.
Background/Discussion
At the February 19, 2018, meeting, staff presented information on a business incubation program which
offers a unique opportunity to encourage the creation and support of new for-profit businesses which
maintain and enhance a sustainable and diverse business climate within the city's business/commercial
districts.
The program allows new business owners an opportunity to receive rent assistance to locate new
businesses into vacant properties within the city. Rent assistance would be provided at decreasing
amounts for a total of 18 months. A new business is defined as a business that had been previously
operating out of a residence.
The program also provides business owners with education and tools to increase opportunities for long-
term success while filling currently vacant commercial properties in the community.
Staff has drafted a policy for review and discussion.
Financial Impact
Funding of the program could come from EDA reserves, or could be included into the budget in 2019.
Attachments
■ Business Incubation Program Policy and Guidelines
The Elk River Vision
A Y�elcoming community nvith revolutionary and spirited resourcefulness, exceptional P U W E H E o s r
service, and community engagement that encourages and inspires prosperity ,g /` UR
Business Incubation Program Guidelines
Goal: To encourage the creation and support of new for-profit businesses which maintain and
enhance a sustainable and diverse business climate within the city of Elk River's
business/commercial districts. Further, this program seeks to provide business owners
with education and tools to increase opportunities for long-term success while filling
currently vacant commercial properties in the community.
For the purposes of this program, a nen business may include a business that had been previously operating
out of a residence.
Funding &Timeline: $ has been set aside for the funding of this program.
The program will run until funds are depleted or until cancellation by the EDA
whichever occurs first.
Assistance: Business owners may receive rent assistance to locate new businesses into vacant
properties within the city. Rent assistance will be provided at decreasing amounts for a
total period of 18 months in accordance with the following schedule:
1. Months 1-6: 50% subsidy or $830/month maximum (whichever is less)
2. Months 7-12: 33% subsidy or $560/month maximum (whichever is less)
3. Months 13-18: 17% subsidy or $275/month maximum (whichever is less)
Business owners admitted to the program will also receive educational assistance in the
form of 90 minute classes on each of the core competencies outlined below:
1. Business Planning and Financial Projections (Prerequisite for thisprogram)
2. Market Research
3. Pricing and Inventory
4. Marketing Strategies
5. Customer Service and Business Etiquette
6. Online Marketing—Websites and Social Media
7. Basic Bookkeeping
8. Legal Considerations for Small Businesses (incl. liability,insurance, taxes,
incorporation,etc.)
Business owners admitted to the program will be provided assistance with incurred issues
or questions in the following ways:
1. Quarterly meetings (with open financials) with the EDA's Economic
Development staff and an assigned representative of the Small Business
Development Center (SBDC). Additional meetings may be scheduled as
necessary and/or desired.
2. Access to Small Business Development Center consultation and resources.
3. Online forum/group for open questions and discussion with other program
participants and successful local businesses.
Property owners within the City will receive assistance with promotion of
available rental spaces.
Payment of rent subsidies will occur upon receipt of proof of rental payment
starting in the business' first month of operation. Payment may only be made
directly to the property owner leasing space to the applicant accepted to this
program by the EDA.
Property owners and businesses owners must be eligible and compliant with
all city building codes and regulations and obligations to receive monetary
assistance benefits delineated above.
In order to receive assistance indicated through this program, lease/terms
must be acceptable as determined by the EDA. Additionally, property must
be zoned for business/commercial usage. Residentially zoned properties will
not be considered.
Contingencies and Considerations:
To improve odds of long-term success, approved applicants are required to
follow program conditions considered to be valuable by the EDA:
1. Business will open within 90 days of approval of application by the
EDA.
2. Business owner will participate in ALL educational classes
(outlined in assistance section of this document) provided through
this program by the EDA.
3. Business owner will meet with the EDA's staff and representative
of the Small Business Development Center on a quarterly basis at
minimum. Financial information and documentation will be
released and reported during these meetings. Additional meetings
may be requested by the business owner or the EDA.
4. Business owner must agree to hours of operation that include at
least five (5) days per week.If the business is retail affiliated,the
business may be required to operate until at least 8 p.m.one (1)
evening/week.
5. Business owner will give a presentation after one (1) year of
successful operation at a public EDA meeting to divulge
challenges and plans for sustained success.
Application & Other Requirements:
The process for admission into this program includes the following steps:
1. Completion of the Business Planning and Financial Projections course. For
schedule and registration,please contact City Hall.
2. Submission of a completed application including the following attachments:
a. Business plan (including 3 years of financial projections excluding
requested program funding)
b. Financial statements
c. Lease agreement (including term and pricing)
d. Types and names of professional services being acquired (e.g. accountant,
legal,etc.)
3. Staff reviews application and attachments. Staff may require/request additional
information or clarification.
4. EDA Finance Committee meeting with applicant to discern any concerns relevant
to the sensitive information within the application.
5. EDA review of presented application at a public meeting of the EDA. Financial
information will be kept private when possible. Applicants are strongly
encouraged to attend this meeting.
6. Applicant will be notified by letter shortly after the meeting of the Board's
decision to approve, deny, or delay voting on the application.
7. Business will open within 90 days of approval; rental subsidies will begin after the
business has opened. The business owner may begin to take required educational
classes (if offered) after approval has been acquired but prior to business hours of
operation commencing.
Please note:
1. Maximum monetary assistance provided per business is$9,990
2. Business owner must comply with all requirements outlined, or any subsidies
received through the program must be immediately repaid to the EDA.
3. Business owner must be willing to release financials including information on
sales,inventory, expenses, etc. upon EDA request.
4. Business must continue to operate within the city of Elk River for three
(3) consecutive years (including 18-month program) from opening. Businesses
that willingly relocate outside of the city prior to the completion of three (3)
years will be required to immediately repay 100% of subsidies received to the
EDA. Businesses that go out of business prior to the completion of three (3)
years may be required to repay all or a portion of received subsidies as
determined appropriate by the EDA.
5. If the applicant is approved for the program, he/she implicitly agrees that the
city may promote the company's usage of the program and include the
company's information in relevant publicity materials/events/etc.
All applications will be reviewed on a first-come-first-serve basis. Approval may be
affected by funding availability.
Applicants must submit a complete application to City Hall on the first Monday of each
month. A complete application will also include all required attachments. Incomplete
applications will be neither accepted nor held.
All property owners and applicants affiliated with the applications and ultimate receipt of
subsidies must ensure that taxes, utility bills, code violations, and other business with the
city of Elk River are current,in compliance with all city regulations and obligations and in
good standing on all properties owned within the city limits in order to apply and receive
the rebate. Past history of delinquency on city matters will also be taken into
consideration before program approval is given. This consideration applies to both
applicants and property owners from whom they mayrent.
This program will be carried out in accordance with the Business Subsidy Policy and
Minnesota Business Subsidy Law.
The EDA will review these program guidelines on an annual basis to ensure maximum
effectiveness.
For More Information:
Questions regarding applications or this program should be directed to Amanda Othoudt at 763-635-1042
or Aothoudt&ElkRiverMN.gov
The EDA reserves the right of ultimate review. The EDA may, at its discretion, approve
projects that deviate from these guidelines if the proposed project is deemed within the
general intent of these guidelines and in the best interest of the community.
City of Elk River Economic Development Authority
Elk River, MN Business Incubation Program
Applicant Information
Date of Submission:
Legal Business Name:
DBA (if applicable):
Mailing Address (where check will be mailed):
PO Box:
City/State/Zip:
Contact Name and Title:
Phone: Email:
Rental Information
Proposed Location of
Business (address):
Landlord Name:
Lease Term: year(s) month(s) Lease Price/Month: $
Square Footage Rented/Used:
Business Details
Anticipated Opening Date:
Anticipated hours of operation (hours/days; days of week)
Monday Tuesday
Wednesday Thursday
Friday Saturday
Sunday
Professional Services being acquired (please list firm you're working with if applicable):
Accounting:
Legal:
Marketing:
Other:
Brief Business Description:
How Many Jobs (including yourself) Will Your Business Be Creating Within 6 Months of Opening?:
Applicant Certification
We, the undersigned certify that the information submitted is true and accurate to the best of our knowledge,
that we have read, understand, and that we will comply with the program guidelines. We confirm that if
approved, the City may use the approved company's name and information in promotional/publicity materials,
events, etc. We understand that this application will be reviewed based on the information provided herein and
that the city of Elk River reserves the right to approve,partially approve, or deny an application at the discretion
of its appropriate Board(s).
Name/Title (Printed) Name/Title (Printed)
Signature Date Signature Date
***Please note that all information in checklist must be included and provided to the city with this
completed application.
Please submit one application with supporting materials to city hall, on the first Monday of the month for
review. Incomplete applications will not be accepted.
Applications will be reviewed on a first come-first serve basis.
Application Checklist:
Complete Application
Business Planning and Financial Projections Course Completion Certificate
Business Plan Including 3 Years of Financial Projections that Exclude Program
Assistance Being Requested
Financial Statements
Lease Agreement