4.6. EDSR 12-21-2020 City of
Elk �-- Request for Action
River
To Item Number
Economic Development Authority= 4.6
Agenda Section Meeting Date Prepared by
Consent December 21, 2020 Colleen Eddy, Economic Development Specialist
Item Description Reviewed by
Subordination Agreement for Alan Arnold Cal Portner, City Administrator
Corporation Yankee Doodle Enterprises,LLC dba Reviewed by
Ralphies Victory Lane
Action Requested
Approve,by motion, a subordination agreement for Yankee Doodle Enterprises,LLC.
Background/Discussion
The EDA approved a$74,999 Energy Efficiency Improvement microloan on September 10, 2013, to Alan
Arnold Corporation which was secured by a corporate guarantee from Yankee Doodle Enterprises,LLC as the
operating entity for Ralphies Victory Lane and a mortgage on the property on a subordinate basis to a contract
for deed from Farmer's State Bank of Heartland in the original principal amount of$465,000 for the property
located at 13374 US Highway 10 NW.
On August 28, 2018, the EDA provided an additional loan in the amount of$19,175.00 to the Borrower for a
total loan amount of$59,657.91 in accordance with an Amended and Restated Energy Efficiency Improvement
Program Loan Agreement, dated August 28, 2018.
Yankee Doodle Enterprises is in the process of refinancing their debt and have requested a loan from Byline
Bank in the amount of$474,000.00 and the Bank has required, as a condition to making the loan,that the
Borrower and Mortgagor obtain from the EDA a Mortgage Subordination Agreement (the "Subordination
Agreement") in favor of the Bank providing for the subordination of the Mortgage to the Bank's mortgage
with respect to the additional financing.
Financial Impact
N/A
Mission/Policy/Goal
The Economic Development Authority for the city of Elk River (EDA) recognizes the need to stimulate
private sector investment into manufacturing and certain commercial facilities and equipment in order to create
new jobs,boost productivity and retain existing jobs for local residents.
Attachments
■ Resolution
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
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 20-12
RESOLUTION APPROVING SUBORDINATION AGREEMENT
Section 1. Recitals.
1.01 On September 13, 2013, the Board of Commissioners (the "Board") of the
Economic Development Authority of the City of Elk River (the "EDA") heretofore provided a
microloan in the amount of $74,999 (the "Original Loan") to Alan Arnold Corporation, a
Minnesota corporation (referred to as `Borrower") which was secured by a corporate guarantee
of Yankee Doodle Enterprises, LLC, a Minnesota limited liability company (the "Mortgagor"),
pursuant to the EDA Energy Efficiency Improvement Program (the "Program"), pursuant to an
Energy Efficiency Improvement Program Loan Agreement, dated September 10, 2013 (the
"2013 Loan Agreement"), between the Borrower and the EDA.
1.02. On August 28, 2018, the EDA provided an additional loan in the amount of
$19,175.00 (the "New Loan" and together with the Original Loan, the "Loan") pursuant to the
Program to the Borrower for a total loan amount of$59,657.91 in accordance with an Amended
and Restated Energy Efficiency Improvement Program Loan Agreement, dated August 28, 2018
(the "Series 2018 Loan Agreement and together with the Series 2013 Loan Agreement, the
"Loan Agreement"), between the Borrower and the EDA, which amended and restated the Series
2013 Loan Agreement.
1.03. The Loan is secured by (i) an Amended and Restated Mortgage and Assignment
of Rents and Security Agreement and Fixture Financing Statement (the "Mortgage"), dated
August 28, 2018, provided by the Mortgagor in favor of the EDA; (ii) an Amended and Restated
Promissory Note, dated August 28, 2018, from the Borrower to the EDA; (iii) a Security
Agreement, dated September 10, 2013, from Borrower to the Lender providing a security interest
in certain equipment purchased with the proceeds of the Original Loan; (iv) a Personal Guaranty,
dated August 28, 2018, from Brian Brehmer to the EDA; (v) a Personal Guaranty, dated August
28, 2018, from Nancy Brehmer to the EDA; and (vi) a Personal Guaranty, dated August 28,
2018, from Allen Meyer; and (vii) a Corporate Guaranty, dated August 28, 2018, from the
Mortgagor to the EDA.
1.04. The Borrower and the Mortgagor requested a loan from Byline Bank(the "Bank")
in the amount of$474,000.00 and the Bank has required, as a condition to making the loan, that
the Borrower and Mortgagor obtain from the EDA a Mortgage Subordination Agreement (the
"Subordination Agreement") in favor of the Bank providing for the subordination of the
Mortgage to the Bank's mortgage with respect to the additional financing, copies of which are on
file with the Executive Director.
NOW THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board") of
the Economic Development Authority of the City of Elk River(the"EDA") as follows:
EL185\57\693396.v1
Section 2. Approval of Subordination Agreement.
2.01. The Subordination Agreement as presented to the EDA is hereby in all respects
approved, in substantially the form submitted, together with any related documents necessary in
connection therewith, and the President and Executive Director are hereby authorized and directed
to execute the Subordination Agreement on behalf of the EDA and to carry out, on behalf of the
EDA,the EDA's obligations thereunder.
2.02. The approval hereby given to the Subordination Agreement includes approval of
such additional details therein as may be necessary and appropriate and such modifications thereof,
deletions therefrom and additions thereto as may be necessary and appropriate and approved by
legal counsel to the EDA and by the President and Executive Director prior to executing said
documents; and said officers are hereby authorized to approve said changes on behalf of the EDA.
The execution of any instrument by the President and Executive Director shall be conclusive
evidence of the approval of such document in accordance with the terms hereof. In the event of
absence or disability of said officers, any of the documents authorized by this Resolution to be
executed may be executed without further act or authorization of the Board by any duly designated
acting official, or by such other officer or officers of the Board as, in the opinion of the City
Attorney,may act in their behalf.
Approved by the Board of Commissioners of the Economic Development Authority of the
City of Elk River this 21 st day of December, 2020.
President
ATTEST:
Executive Director
EL185\57\693396.v1