5. EDSR 11-08-2010 - Laserfiche WebLink

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MEETING OF THE EDA FINANCE COMMITTEE HELD AT THE ELK RIVER CITY HALL THURSDAY, NOVEBMER 4, 2010 Members Present: Chris Carlson, Cliff Lundberg, Paul Motin, Nate Ovall, Dan Tveite, Larry Toth and Chad Vitzthum (proposed member) Members Absent: none Staff Present: Economic Development Assistant Annie Deckert, Director of Economic Development Catherine Mehelich, Accountant Lori Stich Consider Micro Loan Request- Promo Products. LLC Ms. Mehelich summarized the Micro Loan application from Promo Products, LLC. She indicated the applicants, Duane Hass, Director of the company, and Andy Isle, President c>f the company, were applying for an EDA Industrial Incentive Micro Loan in th~~ amount of $2~1,~)Ul)-X25,000 to assist in financing interior remodeling, including an HVAC unit, Iibhting and flooring. "l he loan is proposed to be structured as a participation loan with First National Bank of Elk River and the Ll ).1 ~c~ould obtain a 3~` mortgage lien position on the real estate, in addition t~. ~ c>htaining personal guarantees from the company owners. Promo Products, LLC provide custom Pad printing, silk sere°c~nin~;, hot stamping, multi-color heat transfers and packaging for industrial, medical and promotional products. In operation since 2000, and currently located in Ramsey, the compan} is interested in purch;isin~ a ~-acant 10,000 square feet building located at 19228 Industrial Park Blvd (former L & (_) "1`001 building). "1'hC company currently has eight employees and plans on creating two jobs within the nett tiro ac,lrs. The applicants were in attendance at the meetult; a.nd presented an overview of their company and remodeling plans. They indicated they have met with Elk River Municipal Utilities to discuss rebate options and plan on closing in late. December, with an anticipated move-in date of late February. Their existing lease in Ramscti- is up 'March 15, 2011. Mr. Haas and '~lr. lsl.e were excused fi~~>>n the ~~eeting following this discussion. The finance committee discussed the application and loan terms. MOVED BY TVIETE AND SECONDED BY MOTIN, THE FINANCE COMMITTEE RECOM)<TENDS THAT THE EDA CONSIDER APPROVING THE MICRO LOAN REQUEST FOR PRO1~10 PRODUCTS, LLC, IN THE AMOUNT UP TO $25,000) AT A 3% FIXED INTEREST RATE; GIVING STAFF THE FLEXIBILITY TO NEGOTIATE THE LOAN TERM UP TO 20 YEARS (10 YEAR IS PREFERRED) WITH 5 YEAR BALLON WITH THE EDA TAHING A THIRD MORTGAGE LIEN POSITION ON THE REAL ESTATE IN ADDITION TO OBTAINING PERSONAL GUARANTEES FROM THE COMPANY OWNERS. THE MOTION CARRIED 6-0. 3. Micro Loan Status Updates Updates were provided on Roma Tool, Waterfall and Ethanol Tech Micro Loan applications. Staff will continue to work with the state, attorney and primary lender on these applications. Mr. Ovall suggested staff take a more aggressive stance on loans in default, by attaching judgments to the guarantees or negotiating a forbearance. Staff will discuss these options with City attorneys.