7.0. EDSR 02-13-2006 - Laserfiche WebLink

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Paul Motin stated that it's important that the City know up front if companies axe going to apply Eox a Micro Loan in addition to TRF ox another subsidy. Assistant Director of Economic Development explained the application process to the Committee, indicating that companies axe made aware of each City financing tool prior to the start of the application process but that staff typically recommends the most appropriate financing option. The Committee discussed the issue of companies requesting an additional subsidy fox the same project shortly after the first subsidy is approved, which could affect the City's financial advisor's initial "but For" analysis fox the project. Dan Tveite suggested that companies making additional requests should pay fox an additional "but for" analysis. Tom McNair concurred. Cliff Lundberg added that it wouldn't take much time fox the financial advisors to modify the numbers anylvay. Dave Rymanowski said that companies must be made aware of the fact that the level of TRF offered by the City may change if additional subsidies axe offered fox the same project. Paul Motin indicated that there is a policy issue that needs to be discussed regarding how job creation would be "counted" if more than one subsidy is used. Finance Committee member Chris Carlson said that the City should still review Micro Loan applications carefully because he doesn't recall denying a company fox a Ivlicxo Loan since he has been on the Committee. CliEELundbexg stated that he prefers using the loan program over TRF and suggested that maybe it could be secured by TRF or be an interest only program until the TRF payments begin. The Committee discussed the current Micro Loan terms, which is a 15-year amortization on real estate uses and a 10-year amortization on equipment uses and afive-year balloon payment fox both uses. The Committee concurred that perhaps the amortization term fox real estate uses should be increased to 20 years. Scott Clark asked the Committee if they ever thought of using the Micro Loan program fox commercial projects. Tom McNair answered no but Paul Motin indicated that perhaps the Committee should discuss the issue since the program could be an incentive to attract a class one xestaurantto Elk River. Staff indicated that the Committee's suggested changes to the Micro Loan Policy would be made and brought to the EDA fox approval. A summary of the changes are as Follows: • All subsidies used fox a project must be included in the project's sources and uses upfront. • Applicants shall pay for an additional "but for" analysis if needed. • Job creation goals clarification if more than one subsidy is used for a project. • The Micro Loan amortization term fox real estate uses should be increased to 20 vears. 3. Schedule follow up meeting The Committee did not schedule a follow up meeting. The Committee agreed that an annual review of the Micro Loan Policy was a good idea. 4. Clo~sine The EDA Finance Committee meeting ended at 7:50 am.