6. EDSR 06-14-2010 - Laserfiche WebLink

Home Browse Search

MEETING OF THE EDA FINANCE COMMITTEE HELD AT THE ELK RIVER CITY HALL WEDNESDAY JUNE 9, 2010 Members Present: Cliff Lundberg, Paul Motin, Nate Ovall, Dan Tveite and Larry Toth Members Absent: Chris Carlson Staff Present: Economic Development Assistant Annie Deckert, Director of Economic Development Catherine Mehelich, Accountant Lori Stich 1. Small Business Development Center Presentation- Jack Gabler Consultant Jack Gabler, Small Development Center gave brief presentation regarding the Small Business Development Center (SBDC); outlining its focus, resources and tools offered to small businesses. 2. Discuss Micro Loan Application: The Pizzeria Ms. Deckert summarized the Micro Loan application from The Pizzeria. She indicated the applicant, Frank Galli, owner of The Pizzeria was applying for an EDA Downtown Rehabilitation Micro Loan of $75,000 to assist in financing equipment and interior and exterior revitalization necessary in starting up the business. The EDA would obtain a 15` position mortgage on 315 Jackson. The Galli's would like to refinance their home in lieu of obtaining financing from a private lender; any recommendation made by the Finance Committee is recommended to be made contingent upon securing the loan on their home refinance. Micro Loan Policy guidelines indicate that applicants must have private-sector commitments for 50% of the project cost and that all loans will. be structured as a participation loan that will be serviced by the project's primary lending institution..` She stated that Mr. Galli's application meets all other Downtown Rehabilitation Financing Criteria. The Pizzeria is a start-up business looking to open in downtown Elk River, in the current Elk River Travel location, 315 Jackson. The business is a fast casual Neapolitan Pizza restaurant (cooked at 700 degrees for two minutes or less) similar to Punch Neapolitan Pizza. The distinctive competence to create Neapolitan pizza is high heat crust development and a high heat cooking technique. The applicant, Mr. Galli, provided a thorough overview of his business plan and business operations. He indicated his business would not offer delivery, primarily sit down with some take out. Because the Neopolitan pizza is made with fresh ingredients, he reviewed various local venders he intends to use. He would like to open in three .months; the current tenant of 315 Jackson, Elk River travel, will be vacating the space August 15t. The business will be open approximately 50 hours a week; Tuesday through Saturday; serving lunch Fridays and Saturdays; hours may vary per restaurant traffic. Mr. Galli indicated he was not pursuing private financing because the rate on refinancing the equity in his home is much better than a commercial loan he would receive from a private lender. Mr. Galli was excused from the meeting following this discussion. MOVED BY TVIETE AND SECONDED BY MOTIN, THE FINANCE COMMITTEE RECOMMENDS THAT THE EDA CONSIDER APPROVING THE MICRO LOAN REQUEST FOR THE PIZZERIA, CONTIGENT UPON BUILDING PERMIT APPROVAL, HOME REFINANCE LOAN APPROVAL AND ASSIGNMENTS OF RENT INCLUDED IN THE LOAN AGREEMENT IN THE AMOUNT OF $75,000 AT A 2% FIXED INTEREST RATE FORA 15-YEAR TERM; 5 YEAR BALLON WITH THE EDA TAKING A FIRST POSITION ON THE MORTGAGE OF 315 JACKSON. THE MOTION CARRIED 5-0.