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fiver <br />MEMORANDUM <br />TO: EDA Finance Committee <br />Lori Stich, Accountant City Finance Dept <br />FROM: Catherine Mehelich, Director of Economic Development <br />DATE: November 4, 2010 <br />SUBJECT: Consider Micro Loan Application -Promo Products, LLC <br />Issue <br />A meeting of the EDA Finance Committee will be held at City Hall on Thursday, <br />November 4, 2010 at 7:00 am to review a Micro Loan application from Promo Products <br />LLC. <br />Background <br />Attached is the Micro Loan application submitted by Duane Hass, Director and Andy Isle, <br />President of Promo Products, LLC. Promo Products LLC provides custom pad printing, <br />silk screening, hot stamping, multi-color heat transfers and packaging for industrial, medical <br />and promotional products. The company is currently located in approximately 6,800-SF of <br />leased space in Ramsey, MN and has been in operation since 2000. The company has a total <br />of 8 employees and proposes to create 2 additional jobs within two-years of completing the <br />project. <br />The owners axe interested in purchasing a vacant 10,000-SF manufacturing building located <br />at 19228 Industrial Blvd in Elk River (the former E&O Tool building) and remodeling the <br />building for the company's relocated and expanded operations. The proposed <br />improvements include HVAC, lights, flooring and office remodeling. In order to <br />supplement conventional and SBA504 financing, the company is requesting $24,000 from <br />the Economic Development Micro Loan "Industrial Incentive Program". The loan is <br />proposed to be structured as a participation loan with First National Bank of Elk River, in <br />which the EDA would obtain a 3Ld mortgage lien position on the real estate. In addition the <br />EDA would obtain personal guarantees from the company owners. Depending on the <br />appraised value of the real estate, the EDA may wish to identify additional sources of <br />collateral fox security. <br />