06-16-2025 EDA Packet
Economic Development Authority
Regular Meeting, Work Session
&
Closed Meeting
Agenda
Monday, June 16, 2025
5:30 PM
Elk River City Hall
▪ Regular meeting in Council Chambers
▪ Work Session and Closed meetings in Upper Town Conference Room immediately following regular
meeting
1. CALL MEETING TO ORDER
2. PLEDGE OF ALLEGIANCE
3. CONSIDER AGENDA
4. CONSENT AGENDA
Considered to be routine and noncontroversial and will be approved by one motion. There will be no separate discussion of
these items unless there is a request to remove the item from the consent agenda to the regular agenda.
4.1 Draft Minutes - May 19, 2025
4.2 Check Register
4.3 Balance Sheet
4.4 Revenue/Expenditure Reports
5. OPEN FORUM
An opportunity to provide comments and feedback regarding items not on the agenda. Information provided in Open Forum
will not be discussed at this meeting; rather, the information will be referred to staff and/or scheduled for discussion at a
future meeting.
6. PUBLIC HEARINGS
An opportunity for the public to express their opinions and raise questions pertaining to the agenda item. All comments
become part of the official public record. For this reason, all comments must be made at the podium so they can be heard
and recorded. Comments may also be provided in writing. There will not be deliberations, discussions, or answers to
questions until the hearing is closed. It is important to be courteous and allow each presenter to comment before adding
additional testimony.
7. GENERAL BUSINESS
Items in which the information is presented by city staff or consultants, then deliberation and action occur. General Business
items are not opportunities to receive or provide public input. However, the presiding officer may, at its sole discretion,
solicit public feedback.
7.1 General Updates
8. MOTION TO ADJOURN REGULAR MEETING
9. WORK SESSION
Work Sessions are less formal meetings to encourage dialog. Official action or votes are not typically taken. At the
conclusion of a discussion, a simple consensus provides staff direction for execution of the item. This portion of the agenda
is audio recorded but not video recorded or broadcast. Work Sessions are open to the public; however, visitors who wish
Page 1 of 34
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
to provide input must be invited by the presiding officer, assume a seat at the discussion table and provide their full name
and address for the official record.
9.1 Microloan Program Updates
10. CLOSED MEETING - PID #75-00757-0105 - 17610 TYLER ST. NW
10.1 Statement to be read by the Chair:
"The Economic Development Authority will be closing the meeting pursuant to MN Statute
Section 13D.05, Subdivision 3(c)(1) to consider offers or counteroffers relating to the sale of PID
75-00757-0105, 17610 Tyler ST. NW."
10.2 Motion Calling Closed Meeting
10.3 Hold Closed Meeting
10.4 Motion to Adjourn Closed Meeting
Page 2 of 34
DRAFTPage 3 of 34
DRAFTPage 4 of 34
DRAFTPage 5 of 34
CITY OF ELK RIVER Unpaid Invoice Report - EDA Page: 1
Report dates: ALL-ALL Jun 12, 2025 12:48PM
Report Criteria:
Invoice Detail.GL account = {>=} "920"
Invoice Sequence Description Type Invoice Due Invoice Net Invoice GL Account
Number Number Date Date Amount Check Amount Number
CITY OF ELK RIVER
920
5-2025 EDA 1 EDA SALARIES - MAY 25 Invoice 06/10/2025 06/16/2025 9,979.10 9,979.10 920-4-6210-4101
5-2025 EDA 2 EDA SALARIES - MAY 25 Invoice 06/10/2025 06/16/2025 1,050.00 1,050.00 920-4-6210-4103
5-2025 EDA 3 EDA SALARIES - MAY 25 Invoice 06/10/2025 06/16/2025 763.44 763.44 920-4-6210-4104
5-2025 EDA 4 EDA SALARIES - MAY 25 Invoice 06/10/2025 06/16/2025 629.59 629.59 920-4-6210-4105
5-2025 EDA 5 EDA SALARIES - MAY 25 Invoice 06/10/2025 06/16/2025 151.64 151.64 920-4-6210-4107
5-2025 EDA 6 EDA SALARIES - MAY 25 Invoice 06/10/2025 06/16/2025 1,445.40 1,445.40 920-4-6210-4108
5-2025 EDA 7 EDA REIMB - WC JUL/SEP Invoice 06/10/2025 06/16/2025 133.00 133.00 920-4-6210-4109
5-2025 EDA 8 EDA REIMB - SUPPLIES/STAPLES Invoice 06/10/2025 06/16/2025 14.97 14.97 920-4-6210-4201
Total 17440 CITY OF ELK RIVER: 14,167.14 14,167.14
Total 920: 14,167.14 14,167.14
JOSHUA MOLLAN
920
6092025 JM 1 REIMB MILEAGE 06-09-2025 MOLLAN Invoice 06/09/2025 07/09/2025 36.33 36.33 920-4-6210-4331
Total 14730 JOSHUA MOLLAN: 36.33 36.33
Total 920: 36.33 36.33
PLACER LABS, INC.
920
INUS03113 1 PLATFORM ACCESS-EDA SPLT W/HR Invoice 05/31/2025 06/30/2025 10,500.00 10,500.00 920-4-6210-4433
Total 14728 PLACER LABS, INC.: 10,500.00 10,500.00
Total 920: 10,500.00 10,500.00
CARAHSOFT TECHNOLOGY CORP
920
49656115INV 1 ANNUAL SUBSCRIPTION Invoice 06/06/2025 07/05/2025 390.33 390.33 920-4-6210-4404
Total 13670 CARAHSOFT TECHNOLOGY CORP: 390.33 390.33
Total 920: 390.33 390.33
E D A M
920
1005 1 2025 SUMMER CONFERENCE MOLL Invoice 05/16/2025 06/16/2025 385.00 385.00 920-4-6210-4331
1006 1 2025 SUMMER CONFERENCE O'NEIL Invoice 05/16/2025 06/16/2025 385.00 385.00 920-4-6210-4331
Total 17025 E D A M: 770.00 770.00
Total 920: 770.00 770.00
Total : 25,863.80 25,863.80
Grand Totals: 25,863.80 25,863.80
Page 6 of 34
CITY OF ELK RIVER Unpaid Invoice Report - EDA Page: 2
Report dates: ALL-ALL Jun 12, 2025 12:48PM
Summary by General Ledger Account Number
GL Account Number Debit Credit Net
920-4-6210-4101 9,979.10 .00 9,979.10
920-4-6210-4103 1,050.00 .00 1,050.00
920-4-6210-4104 763.44 .00 763.44
920-4-6210-4105 629.59 .00 629.59
920-4-6210-4107 151.64 .00 151.64
920-4-6210-4108 1,445.40 .00 1,445.40
920-4-6210-4109 133.00 .00 133.00
920-4-6210-4201 14.97 .00 14.97
920-4-6210-4331 806.33 .00 806.33
920-4-6210-4404 390.33 .00 390.33
920-4-6210-4433 10,500.00 .00 10,500.00
Grand Totals: 25,863.80 .00 25,863.80
Summary by General Ledger Posting Period
GL Posting Period Debit Credit Net
00/00 25,863.80 .00 25,863.80
Grand Totals:
25,863.80 .00 25,863.80
Report Criteria:
Invoice Detail.GL account = {>=} "920"
Page 7 of 34
CITY OF ELK RIVER
Balance Sheet
May 31, 2025
Fund 920 - EDA
Assets
920-1010 Cash - EDA 2,372,717.15
Total Assets 2,372,717.15
Fund Equity
920-2400 Fund Balance 2,418,623.64
Revenues over Expenditures - YTD (45,906.49)
Total Fund Equity 2,372,717.15
Total Liabilities & Equity 2,372,717.15
Page 8 of 34
CITY OF ELK RIVER
Revenues with Comparison to Budget
For the Months Ending May 31, 2025
Fund 920 - EDA
Period Actual YTD Actual Budget Unexpended PCNT
920-3-0000-3111 Property Taxes - - 427,000.00 427,000.00 0%
920-3-0000-3342 Other Local Grants - 1,600.00 - (1,600.00) 0%
920-3-0000-3621 Interest Income 5,686.94 34,800.74 25,000.00 (9,800.74) 139%
920-3-0000-3949 Transfer-HRA - - 4,000.00 4,000.00 0%
Total Fund Revenue 5,686.94 36,400.74 456,000.00 419,599.26 8%
Page 9 of 34
CITY OF ELK RIVER
Expenditures with Comparison to Budget
For the Months Ending May 31, 2025
Fund 920 - EDA
Period Actual YTD Actual Budget Unexpended PCNT
920-4-6210-4101 Regular Pay 9,979.11 38,918.51 130,800.00 91,881.49 30%
920-4-6210-4103 Part-time Pay 1,050.00 4,200.00 12,600.00 8,400.00 33%
920-4-6210-4104 PERA 763.44 2,993.89 10,000.00 7,006.11 30%
920-4-6210-4105 FICA 611.00 2,426.67 8,800.00 6,373.33 28%
920-4-6210-4107 Medicare 147.26 589.26 2,100.00 1,510.74 28%
920-4-6210-4108 Insurance 1,445.40 6,861.60 25,500.00 18,638.40 27%
920-4-6210-4109 Workers Comp - 266.00 650.00 384.00 41%
920-4-6210-4201 Office Supplies 3.80 89.84 3,000.00 2,910.16 3%
920-4-6210-4212 Fuels & Lubes - - 50.00 50.00 0%
920-4-6210-4304 Legal Fees - - 10,000.00 10,000.00 0%
920-4-6210-4319 Professional Services - - 25,000.00 25,000.00 0%
920-4-6210-4321 Telephone - - 400.00 400.00 0%
920-4-6210-4322 Postage 0.70 0.70 100.00 99.30 1%
920-4-6210-4331 Travel, Conferences & Schools 248.57 3,270.34 11,000.00 7,729.66 30%
920-4-6210-4349 Advertising/Marketing - 11,481.99 73,600.00 62,118.01 16%
920-4-6210-4359 Publishing - 77.40 1,000.00 922.60 8%
920-4-6210-4361 Insurance - 54.00 250.00 196.00 22%
920-4-6210-4404 Software Services - 3,600.00 15,000.00 11,400.00 24%
920-4-6210-4433 Dues & Subscriptions - 4,477.03 4,650.00 172.97 96%
920-4-6210-4440 Miscellaneous - 3,000.00 73,500.00 70,500.00 4%
920-4-6210-4721 Transfer-General Fund - - 48,000.00 48,000.00 0%
Total Fund Expenditures 14,249.28 82,307.23 456,000.00 373,692.77 18%
Net Revenue Over Expenditures (8,562.34) (45,906.49) - 45,906.49 0%
Page 10 of 34
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
Economic Development Authority
Item Number
7.1
Meeting Date
June 16, 2025
Prepared By
Brent O'Neil, Economic Development Director
Item Description
General Updates
Reviewed by
Cal Portner
Action Requested
This item is presented for information and discussion purposes.
Background/Discussion
This item is an opportunity to discuss relevant topics and other non-action items of the board.
Financial Impact
N/A
Mission/Policy/Goal
Support Commercial and Industrial Development in Elk River.
Attachments
None
Page 11 of 34
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
Economic Development Authority
Item Number
9.1
Meeting Date
June 16, 2025
Prepared By
Brent O'Neil, Economic Development Director
Item Description
Microloan Program Updates
Reviewed by
Cal Portner
Action Requested
This item is presented for information and discussion purposes.
Background/Discussion
The EDA Microloan program is made up of four sub-programs: Industrial Incentive, Downtown Revitalization,
Energy Efficiency Improvement, and Microbrewery. We recently met with the Joint Finance Committee (JFC)
to discuss possible changes and expansion of the loan fund. Below is a summary of points of potential changes
to the program(s). With feedback from the board, we'd anticipate presenting marked-up changes for approval
at an upcoming EDA meeting.
The loan scoring criteria is obsolete (see page 20 of the program application) as some of the metrics are
dated, and the final score does not play a large factor in determining a loan award. It is possible that the
scoring criteria could be removed or scaled back to be a more effective tool in loan determinations.
Interest rates for all sub-programs are fixed at 3%. In the present rate environment, 3% is a considerable
discount from the market, yet also serves as an inventive rate to those who utilize it. The JFC discussed
indexing the rate to a national standard, whether prime or other measure, and adjusting periodically as the
index changes. It was recommended to also consider the investment rate on EDA funds and ensure the
lending rate is at or above that level. It is also possible that the EDA would wish to consider different rates for
different sub-programs.
The current loan application fee is $500 for all programs. This is intended to cover the hard costs of the EDA
in executing loan documents and any other loan review expenses. Applicants are responsible for costs that
exceed that amount and are invoiced for those costs. The JFC discussed rolling those costs into the loan
either on the back end of the payment schedule or by reducing the net proceeds in the loan disbursement.
The sub-programs are generally set up for longer-term amortizations with a balloon payment structure so
that loans mature at the 60th month. While there is a case to be made for the balloon structure in the case of
equipment purchases or to replenish the fund more quickly, there may also be a benefit to setting some loans
up on level repayment over a longer period than five years. It is common for existing borrowers to request
extensions as the five-year period approaches.
The committee suggested developing criteria for allowing loans of an elevated quality or desirability to go
Page 12 of 34
straight to the EDA and bypass JFC review.
The committee also favored adding a provision to the policy limiting the EDA's security position to no lower
than 3rd position on any loan, subject to case-by-case consideration and adjustment of terms for any lower
position request.
In addition to these policy considerations, a major discussion point is the expansion of the fund program to
stretch its reach for commercial projects, with an intended focus on renovation or support of existing
properties. Options were discussed to expand the boundaries of the downtown program or develop a new
subprogram city-wide with its own criteria.
Financial Impact
N/A
Mission/Policy/Goal
Support Commercial Business in Elk River.
Attachments
1. Economic Development Business Microloan Fund Policy and Application (v. 2022)
Page 13 of 34
Powered by Nature
Economic Development
Business Microloan Fund
Guidelines, Policy & Application
Amended:
May 2011
November 2013
July 2014
November 2014
December 2016
April 2017
August 2017
May 2020
May 2022
City of Elk River
Economic Development Division
13065 Orono Parkway
Elk River, MN 55330
763.635.1040
Page 14 of 34
Page 2 of 21 EDA Approved May 16, 2022
ELK RIVER ECONOMIC DEVELOPMENT
BUSINESS MICROLOAN FUND GUIDELINES, POLICY &
APPLICATION
1. POLICY PURPOSE
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. Additionally, the need exists to encourage
investment in the expansion and/or rehabilitation of commercial and retail buildings
in order to maintain the economic viability of the city and in the Downtown District.
Subsequently, the purpose of this microloan program is to provide low interest, long-
term (i.e. greater than one year) loans as incentives for new industrial and
commercial development within the city of Elk River and to encourage commercial
and retail business owners in the Downtown District to rehabilitate their existing
buildings.
2. ELIGIBLE BUSINESSES
Any project located or proposed to be located within the city limits of Elk River as
defined by this microloan program, may be eligible for a Microloan as further
defined herein:
• Unless otherwise stated, business must be a for-profit corporation,
partnership, or sole proprietorship.
• Business must be a small business as defined by the Small Business
Administration (SBA).
• Religious, political, and pornographic enterprises are not eligible.
3. MICROLOAN FUND TERMS & CONDITIONS
Loan Structure
All Economic Development Microloans shall be structured as direct loans unless
otherwise approved by the EDA Finance Committee. If a participation loan is
requested, an agreement will be signed by the borrower, primary lender and the
EDA.
The EDA may require additional agreements to be signed by the borrower
(i.e. security agreement, personal guarantees, business subsidy agreement).
Simultaneous Microloans
The simultaneous use of different EDA microloan programs by any one borrower or
for any one project is prohibited.
Loan Repayment
Jobs Incentive funds, including principal and interest received may not be used to
support restaurant, retail, casinos, or sports facilities.
Page 15 of 34
Page 3 of 21 EDA Approved May 16, 2022
Call of Loan
A loan shall become due and payable in full if a business relocates outside of the city
of Elk River prior to the maturity date of the loan.
Late Payment Charge
A late payment charge of 8% of the installment amount will be enforced following a
grace period of 10 calendar days.
4. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS
All buildings which public funds will be used for construction or renovation are to
be brought into conformance with city ordinances and state building codes.
5. LOAN SECURITY AND GUARANTEES
Applicant must be able to secure the loan by providing the EDA with a minimum of
a subordinate mortgage upon the building and/or assets or other approved collateral
equal to the amount of the loan.
Applicant must demonstrate the financial means to repay the loans, as determined by
the EDA.
Whenever possible, personal, corporate, and/or entity guarantees will be made part
of any loan agreement.
Key person life insurance may be required as determined by the EDA Finance
Committee based on loan amount and company ownership partners.
6. TIMING OF PROJECT EXPENSES
No project should commence until the EDA has approved the loan application.
Any costs incurred prior to the approval of the loan application are not eligible
expenditures.
No building construction should commence until the required city permits are
secured.
The applicant will be responsible for all legal, recording, and other fees required for
protection of a security interest in the loan, payable by a $500 processing fee, which
is paid at the time of application. In addition to the processing fee, all legal and filing
fees shall be paid by the borrower at loan closing.
Closing of the Microloan should be simultaneous with the borrower’s primary
funding. The EDA should be given two weeks’ notice before closing.
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Page 4 of 21 EDA Approved May 16, 2022
7. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL
1. All applicants shall first contact a primary lending institution to determine if
additional equity is needed, and if so, how much (if applicable).
2. The applicant shall then meet with city staff to obtain information about the
microloan program, discuss the project, and obtain application forms.
3. The applicant shall complete and submit an application form to the city, along
with a $500 processing fee. The fee is used to cover processing expenses and any
remaining funds will be returned to the applicant. The applicant must provide
evidence of their ability to meet the 10% equity requirements or provide a letter
of commitment for conventional financing from the primary lending institution.
4. The EDA is a governmental entity and as such must provide public access to
public data it receives. Data deemed by Applicant to be nonpublic data under
State law should be so designated or marked by Applicant. See Minn. Sat.
Sections 13.59, Subd. 1, respectively.
5. The application will be reviewed by the city staff to determine if it conforms to
all city policies and ordinances and to consider the following:
a. The availability and applicability of other governmental grants and/or
microloan programs.
b. Whether the proposed project will result in conformance with building
and zoning codes.
c. Whether it is desirous and in the best interests of the public to provide
funding for the project.
6. The EDA Finance Committee and EDA Commissioners will review each
application in terms of its consistency with the goals of the city’s Comprehensive
Plan and Economic Development Strategic Plan and in relation to the project’s
overall impact on the community’s economy. Downtown Revitalization Loan
applications will also be reviewed by a Housing & Redevelopment Authority
Commissioner in conjunction with the EDA Finance Committee. Energy
Efficiency Improvement Loan applications will also be reviewed by an Energy
City Commissioner in conjunction with the EDA Finance Committee.
The EDA Finance Committee will evaluate the project application in terms of
the following:
a. Project Design - Evaluation of project design will include review of
proposed activities, timelines and a capacity to implement the project.
b. Financial Feasibility - Availability of funds, private involvement, financial
packaging and cost effectiveness.
• Appropriate ratio of private funds to Microloan funds.
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Page 5 of 21 EDA Approved May 16, 2022
• Sufficient cash flow to cover proposed debt service as demonstrated
by financial statements and projections.
• Letter of Commitment from applicant pledging to complete the
project during proposed project duration, if the loan application is
approved.
• Letter of Commitment from other financing sources stating terms
and conditions of their participation in the project if applicable.
• Sufficient collateral.
c. All other information as required in the application and/or additional
information as may be requested by the Economic Development staff.
d. Project compliance with all city codes and policies.
e. Microloan Objectives - In addition to quality job and wage
creation/retention requirements, the applicant must meet all Microloan
Fund criteria and demonstrate how the proposed activities will meet at
least one of the following objectives:
• The project contributes to the fulfillment of the city’s approved and
adopted economic development and/or redevelopment plans.
• The project prevents or eliminates slums and blight.
• The project increases the local tax base.
• The project brings a structure into compliance with an existing
building code violation.
7. A written request for an extension shall be accompanied by a copy of current
financial statements and a $500 upfront processing fee. The processing fee is
used to cover processing expenses. The application for an extension beyond the
original term should include a letter of denial from a conventional lender.
8. The EDA Finance Committee will recommend the approval, denial, or request a
resubmission. A recommendation from the Finance Committee will be
forwarded to the EDA for recommendation of approval, denial to the City
Council for final action.
8. MICROLOAN POLICY REVIEW
The above criteria will be reviewed on an annual basis to ensure that the policies
reflected in this document are consistent with the economic development goals set
forth by the city.
9. RIGHT OF REFUSAL
The EDA may deny any application if it is found not consistent with the goals of the
city’s Comprehensive Plan and Economic Development Strategic Plan and in
relation to the project’s overall impact on the community’s economy.
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Page 6 of 21 EDA Approved May 16, 2022
10. COMPLIANCE WITH MN BUSINESS SUBSIDY LAW
All developers/businesses receiving financial assistance from the City of Elk River
shall be subject to the provisions and requirements set forth by the City’s Business
Subsidy Policy as amended and Minnesota Statutes Sections 116J.993 to 116J.995
(the “Minnesota Business Subsidy Law”) if applicable.
11. Agreement to Pay Costs of Review
It is the policy of the city of Elk River to require applicants to pay costs incurred by
the city in reviewing and acting upon applications, so that these costs are not borne
by the taxpayers of the city. These costs include all of the city’s out-of-pocket costs
for expenses, including the city’s costs for review of the application by the city’s
Financial Consultant and City Attorney, or other consultants, recording fees, and
necessary publication costs.
The application processing fees cover anticipated costs; costs incurred above the
application fee will be invoiced as they are incurred, and payment will be due within
thirty (30) days. Any unused portion of the application fee will be returned to the
applicant. If payment is not received as required by this agreement, the city may
suspend the application review process and may deny the application for failure to
comply with the requirements for processing the application. Payment for costs will
be required whether the application is granted or denied.
12. Microloan Programs
In order to meet the economic and community development objectives of the EDA,
five distinct microloan programs exist within the Business Microloan Fund.
Industrial Incentive Loan
Purpose: The purpose of the Industrial Incentive Loan is to encourage
industrial and high technology business development that supports
the tax base and brings quality jobs to the city.
Amount: Up to $200,000 of secondary financing not to exceed 20% of the
total project cost.
Remaining
Principal: Must have private-sector commitments for 50% of the project cost.
Borrower must provide 10% or more of project financing.
Rate: Fixed at 3%
Term: Loans must mature within 5 years, but must be amortized over a
longer period of time. The balloon payment must not be longer than
the balloon payment of the participating bank if applicable. Loans
may be amortized up to the following limits:
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Page 7 of 21 EDA Approved May 16, 2022
20 years on real estate uses;
10 years on equipment uses.
Extension: In the event that the Borrower is unable to pay off the loan or
refinance the Microloan at the end of five years, the loan may be
extended up to two additional years at 3% interest.
Criteria: Borrower must be an industrial or high technology business and create
or retain one new full-time job for each $20,000 loaned within 2 years.
Said jobs must pay a minimum wage of $15.00 per hour excluding
benefits required by law. Loans of $75,000 or more shall meet the city
of Elk River Business Subsidy Policy for the creation of new jobs at a
minimum wage of $15.00 per hour excluding benefits required by law,
as well as a 5-year location requirement.
In the case where multiple sources of public financing are requested
(e.g. Microloan and Tax Increment Financing) job creation goals shall
not be double-counted.
Borrower must comply with the provisions of the city’s Industrial and
Business Park zoning ordinances as applicable.
Permitted Fund Uses:
a. Building construction
b. Land acquisition
c. Machinery
d. Furniture, fixtures, and equipment (FF&E)
e. Renovation and modernization of buildings
f. Public infrastructure needed for economic development expansions
g. Investment real estate with a minimum of 50% of the space pre-leased
Ineligible Fund Uses:
a. Expenditures for the construction and/or renovation of residential units
b. Inventory
c. Refinancing of existing debt
d. Working capital
Downtown Revitalization Financing Loan
Purpose: The Downtown Revitalization Financing Loan is available to business
and property owners in the Downtown Area primarily for the
rehabilitation and restoration of older buildings, as well as new business
development. Non-profit organizations may be considered. The
Downtown Area shall be described as that area in the attached in
Exhibit A.
Page 20 of 34
Page 8 of 21 EDA Approved May 16, 2022
Amount: Up to $74,999 of secondary financing not to exceed 20% of the total
project cost.
Remaining
Principle: Must have private-sector commitments for 50% of the project cost.
Borrower must provide 10% or more of project cost.
Rate: Fixed at 3%.
Term: Financing with a balloon payment in up to 5-years. Loans may be
amortized up to the following limits:
20 years on real estate uses;
10 years on equipment uses.
Extension: In the event that the Borrower is unable to pay off the loan or
refinance the Microloan at the end of five years, the loan may be
extended up to two additional years at 3% interest.
Criteria: At a minimum, 20% of Microloan dollars must be used for the
improvement of the building façade, with exceptions to be considered
when it appears the façade improvements are not necessary. Financing
of leasehold improvements will be considered at a limit of $25,000.
Permitted Fund Uses:
a. Building construction
b. Renovation and modernization of buildings
c. Furniture, fixtures, and equipment (FF&E)
d. Exterior renovation of retail or commercial buildings
e. Financing of leasehold improvements including façade improvements
will be considered at a limit of $25,000
f. Expenditures for the construction and/or renovation of residential
units
Ineligible Fund Uses:
a. Inventory
b. Refinancing of existing debt
c. Working capital
Energy Efficiency Improvement Loan
Purpose: The Energy Efficiency Improvements Loan is available to property
owners of commercial or industrial buildings in Elk River to provide
low interest loans to businesses to invest in energy efficiency and
improve their profitability through reduced energy costs. In addition,
the microloan program helps the city of Elk River use energy
conservation as an economic development tool. Non-profit
organizations may be considered.
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Page 9 of 21 EDA Approved May 16, 2022
Amount: Applicants may apply for the cost of improvements up to $74,999
Equity: Must have a minimum of 10% equity provided by the borrower.
Rate: Fixed at 3%
Term: The maximum maturity date of the loan will be determined by the
useful life of the improvement and the energy payback achieved as
determined by ERMU.
For projects that have a shorter length of payback (2-5) years as
calculated according to energy savings, the loans will have an initial
maturity of up to 5 years from the date of closing.
Longer life improvements (6-15 years) may apply for a longer
maturity of up to 10 years.
Criteria: Microloan funds shall be spent on energy efficiency improvements
outlined below or related building improvement costs
Applicant must agree to energy audits conducted under the utility
company’s Conservation Improvement Program (CIP). If warranted,
engineering studies then are performed on facilities with conservation
opportunities under the utility company’s CIP Program.
Energy efficiency is defined as improvements that are rebatable by
the Elk River Municipal Utilities (ERMU) or the utility provider for
the property if not ERMU. Proposed energy efficiency improvements
that do not qualify for the utility’s prescriptive rebate program will be
reviewed and approved by the utility company servicing the upgrade
measures (e.g. Elk River Municipal Utilities, Connexus, CenterPoint)
along with a letter indicating eligible utility rebates.
Utility rebates as applicable will be assigned to the Elk River EDA
and applied toward principal repayment of the loan.
An Elk River Energy City Commission member will be asked to
participate in the EDA Finance Committee review.
The loans will be secured by personal and corporate guarantees, and
if applicable a lien on equipment financed and subordinate mortgage
on the property.
Installation must be certified through a licensed contractor and
electrician. New construction is eligible when participating with a
utility company rebate program. Eligible costs shall include only
incremental costs over industry design standards.
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Page 10 of 21 EDA Approved May 16, 2022
Permitted Fund Uses:
a. Energy efficiency measures installed in or on a building include:
b. Facility systems optimization (commissioning/re-commissioning)
c. Facility systems control improvements
d. Process efficiency improvements (CenterPoint Energy)
e. Lighting efficiency improvements
f. Heating, ventilation and air conditioning system modifications
g. Exterior envelope improvements
h. Motor and pump efficiency improvements
i. Ground-source heat pump systems used to heat or cool a facility
j. Installation of equipment or devices that use renewable energy sources to
generate electricity or heat or cool a building including solar electricity
(photovoltaic), wind turbine or solar thermal.
Ineligible Fund Uses:
a. Inventory
b. Refinancing of existing debt
c. Working capital
d. Expenditures for the construction and/or renovation of residential units
Micro-Brewery Loan
Purpose: The Micro-Brewery microloan is available to business and property
owners located within the city of Elk River.
Amount: Up to $74,999 of secondary financing not to exceed 20% of the
Total project cost.
Equity: Must have private-sector commitments for 50% of the project cost.
Borrower must provide 10% or more of project financing.
Rate: Fixed at 3%.
Term: Financing with a balloon payment in up to 5-years. Loans may be
amortized up to the following limits:
10 years on equipment uses
Extension: In the event that the Borrower is unable to obtain conventional
financing to replace the Microloan at the end of five years, the loan
may be extended up to two additional years at a market rate of
interest.
Criteria: At a minimum, 50% of Microloan dollars must be used for the
purchase of equipment.
Loans must be supported by sufficient collateral, which will include
personal guarantees.
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Page 11 of 21 EDA Approved May 16, 2022
Permitted Fund Uses:
e. Renovation and modernization of buildings
f. Furniture, fixtures, and equipment (FF&E)
g. Exterior renovation of retail or commercial buildings
h. Financing of leasehold improvements including façade improvements
will be considered at a limit of $25,000
Ineligible Fund Uses:
a. Inventory
b. Refinancing of existing debt
c. Working capital
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Page 12 of 21
ELK RIVER ECONOMIC DEVELOPMENT
MICROLOAN FUND APPLICATION
1. CONTACT INFORMATION
Legal Name of Business:
Project Site Address:
City / State / Zip
Contact Person(s)
Business Phone Fax
Home Phone Email
Check One: Proprietor Corporation Partnership
Federal ID # State ID #
2. NATURE OF LOAN REQUEST
Which Microloan Program are you applying for?
Industrial Incentive Loan
Downtown Revitalization Financing Loan
Energy Efficiency Improvement Loan
Micro-Brewery Loan
______ COVID-19 Small Business Loan
Amount Requested: $ Total Project Cost: $
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 / Retail / Industrial
Other
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Page 13 of 21
Please give a brief summary of your business and its products or service:
Please give a brief summary of the project:
Please describe how this loan will impact your project:
3. FINANCING
Project Costs
Land $
Site improvements $
Buildings (attach plans & costs) $
Equipment/Machinery/Fixtures
(attach list and estimated costs) $
Remodeling $
Industrial Inventory/Working Capital $
Other (attach description) $
Total Costs $
Comments:
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Page 14 of 21
Proposed Sources of Financing
SOURCE NAME TERMS AMOUNT
Bank Loan __________ $_________
Bank Loan __________ $_________
Other Private Funds __________ $_________
Applicant Contribution $_________
Other __________ $_________
Fed Grant/Loan __________ $_________
State Grant/Loan __________ $_________
EDA Microloan __________ $_________
Tax Increment Financing $
Tax Abatement $
Total Financing $_________
Collateral Assignments
Lien
Description of Collateral Position
To Bank 1
To Bank 2
To Private Sources
To Other Sources
To Federal Govt
To State
To EDA Microloan
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Page 15 of 21
Value of Collateral
Book Value Cost Existing Liens
Land $_________ $___________ $__________
Buildings $_________ $___________ $__________
Machinery & Equip. $_________ $___________ $__________
Other__________ $_________ $___________ $__________
Other__________ $_________ $___________ $__________
4. JOB & WAGE GOALS
Present # of Employees_____________ Total Payroll_____________
Jobs To Be Created*
Please provide the following information on jobs you expect to create within 2-years.
Job Title
Number
of Jobs
Average
Hourly
Wage
Annual
Salary
Are the Jobs
Permanent or
Temporary?
Expected
Hiring
Date
*If loan is for job retention only, please explain in Business Plan.
Microloan Program Objectives
(Check all that apply)
_____ The project contributes to the fulfillment of the city’s approved and adopted
economic development and/or redevelopment plans.
_____ The project prevents or eliminates slums and blight.
_____ The project increases the local tax base.
_____ The project brings a structure into compliance with an existing building code
violation.
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Page 16 of 21
5. PROJECT CONTACTS
Attorney
Name
Address
Phone ______
Accountant
Name ______
Address
Phone
Financing Sources (lenders, partners, etc…)
Name ______
Address
Phone
Name ______
Address
Phone
Parent Company
Name ______
Address
Phone
Others
Name ______
Address
Phone
Name ______
Address
Phone
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Page 17 of 21
6. ATTACHMENTS CHECK LIST
Please attach the following:
______A) Written Business Plan:
1. Description of Business
2. Ownership
3. Management
4. Date Established
5. Products/Services
6. Future Plans
_______B) Financial Statements for Past Three Years and Year to Date
1. Profit & Loss Statements
2. Balance Sheets
_______C) Financial Projections for up to Three Years
_______D) A Project Proforma to include:
1. Projected revenues,
2. Operating expenses,
3. Net Operating Income, and
4. Annual Debt Service and Loan Payments.
_______D) Resume of Owner/Management
_______E) Personal Financial Statements of Proprietor, Partners,
Guarantors
_______F) Letter of Commitment from Applicant Pledging to Complete
During the Proposed Project Duration
_______G) Letter of Commitment from the Other Sources of Financing,
Stating Terms and Conditions of their Participation in
Project
_______H) Processing Fee of $2,000 (Waived for COVI-19 Small Business Loan)
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Page 18 of 21
7. 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.
The undersigned has received the city’s policy regarding the payment of costs of review,
understands that reimbursement to the city of costs incurred in reviewing the application will
be required, agrees to reimburse the city as required in the policy and make payment when
billed by the city, and agrees that the application may be denied for failure to reimburse the
city for costs as provided in the policy.
APPLICANT SIGNATURE _______
BY
DATE
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Exhibit A: Downtown Area
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MICROLOAN APPLICATION SCORING WORKSHEET
1. The project meets the criteria set forth in the appropriate the Microloan policy.
a) Meets at least one of the microloan objectives in Section 7; 6(e).
c) Consistent with all city plans and ordinances.
d) Meets the wage requirements as defined in the city’s business subsidy policy.
2. Ratio of Private to All Public Investment in Project: Points: _____
$ Private Investment 5:1 5
$ Public Investment 4:1 4
Ratio Private: Public Financing 3:1 3
2:1 2
Less than 2:1 1
3. Job Creation in the City of Elk River: Points: _____
Number of new jobs as a result of the project. 25+ 5
Number of existing/retained jobs 20+ 4
Total 15+ 3
10+ 2
Less than 10 1
4. Ratio of Public Investment to Job Creation: Points: _____
$ Public Investment $8,000 or less 5
Number of new jobs created/retained $10,000 or less 4
$ of Public Investment per new job $12,000 or less 3
$15,000 or less 2
Over $15,000 1
5. Wage Level of jobs created/retained or relocated Points: _____
Minimum hourly wage Over $21/ hour 5
of jobs created/retained: $18-21 / hour 4
$15 / hour 3
6. Project size: Points: _____
The project will result in the construction 40,000+ 5
of square feet 30,000+ 4
20,000+ 3
10,000+ 2
10,000 or less 1
TO BE COMPLETED BY CITY STAFF
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Page 21 of 21
7. Market Value/Tax Base Generation: Points: _____
The project will result in a per square foot Industrial Commercial
estimated market value (land and building) $80/sf+ $110/sf+ 5
of $70/sf+ $100/sf+ 4
$60/sf+ $90/sf+ 3
$50/sf+ $80/sf+ 2
$40/sf+ $70/sf+ 1
8. Type of Project: Points: _____
100% Owner Occupied 5
Mix Owner Occupied & Investment 4
Investment Property 3
9. Use: Points: _____
Industrial or Business Park Project 5
Commercial/Retail Rehabilitation/Redevelopment 4
______ Downtown Revitalization or Microbrew 3
10. Likelihood that the project will result in Points: _____
unsubsidized, spin-off development. High 5
Moderate 3
Low 1
11. Point Adjustments Point Adjustments:
The project contributes to the goals of Energy City. 5 points
• Product promotes sensible use of energy, OR
• Project utilizes significant energy efficient design &/or
materials in construction.
Sub - Total Points: of a possible 45 points.
Total Points:
Overall project desirability: High 50-35 points
Moderate 34-29 points
Low 28-20 points
Not Eligible 19-0 points
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