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Economic Development Authority Minutes <br />March 10, 2003 <br />6. Spoxtech Expansion Project <br />Page 2 <br />Catherine iVlehelich repotted that staff has been working with local manufacturer, <br />Spoxtech, Inc. on the company's proposed expansion project. Spoxtech, Inc. wishes <br />to expand operations with the addition of a 20,000 s.f. building and new equipment <br />purchases. <br />Catherine noted that the City Council recently authorized staff to proceed with an <br />application to the Minnesota Department of Trade and Economic Development <br />(DYED) Investment Fund fox a grant in the amount of $200,000 to assist with a loan <br />for Sportech, Inc. Catherine presented the proposed financing terms to the ED?~. <br />COMMISSIONER TVEITE MOVED TO RECOMMEND THE <br />FOLLOWING LOAN TERMS TO THE CITY COUNCIL FOR THE <br />PURPOSE OF PROVIDING A LOAN TO SPORTECH, INC. WITH <br />FUNDS FROM THE MN INVESTMENT FUND GRANT: <br />• LOAN AMOUNT: $200,000 <br />• LOAN PURPOSE: EQUIPMENT FINANCING <br />• TERM: 7-YEAR AMORTIZATION <br />• INTEREST RATE: 2% <br />• SECURITY: 1sT LIEN POSITION ON NEW EQUIPMENT. <br />COMMISSIONER MOTIN SECONDED THE MOTION. THE MOTION <br />CARRIED 4-0. <br />Catherine iViehelich reviewed information pertaining to a memo she distributed in <br />regard to establishing a Local Development Organization fox the Sportech expansion <br />grant application. Catherine explained that the use of the DYED federal funds <br />requites the City to meet federal program requirements, including job creation For <br />LMI land Environmental Reviews. She explained that the City could bypass the <br />requirements by requesting authorization from DYED to transfer federal Small <br />Cities funds to a Local Development Organization such as the EDA or HRi1. <br />COMMISSIONER MOTIN MOVED TO RECOMMEND THAT THE <br />CITY COUNCIL REQUEST AUTHORITY FROM DYED TO <br />DESIGNATE THE ELK RIVER ECONOMIC DEVELOPMENT <br />AUTHORITY IN THE CITY OF ELK RIVER AS A LOCAL <br />DEVELOPMENT ORGANIZATION AND AUTHORIZE THE EDA TO <br />RECEIVE THE REPAYMENTS FROM THE MN INVESTMENT FUND <br />SCDP SET-ASIDE LOAN TO SPORTECH, INC. COMMISSIONER <br />TVEITE SECONDED THE MOTION. THE MOTION CARRIED 4-0. <br />