2. EDSR 08-21-2006 - Laserfiche WebLink

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MEMORANDUM TO: EDA Finance Committee CC: Lori Johnson, City Administrator/Interim Finance Director FROM: Catherine Mehelich, Director of Economic Development~jJ/J DATE: August I I , 2006 ~~ ~~ cc SUBJECT: Micro Loan Application - Olde Main Eatery Attachments City of Elk River Micro Loan Fund Policy Application and related attachments - Olde Main Eatery Issue Staff has received a request by Karen and Nagy Attia, of Olde Main Eatery fox a Downtown Rehabilitation Financing Program Micro Loan in the amount of $50,000 to be used for a portion of the financing necessary to purchase the building located at 313 Main Street. The loan is proposed to be structured as a participation loan with First National Bank of Elk River. Background Olde Main Eatery was established in 1997 as afamily-oriented cafe serving breakfast and lunch in downtown Elk River. The original owners of the business, and current property owner, were awarded an EDA micro loan in the amount of $50,000. The loan has since been paid in full. The applicant acquired the business in 2001 and has leased the restaurant space from the building owner since that time. The Attia's have an opportunity to exercise a purchase option of the building by the end of August 2006. The applicant has been working with First National Bank of Elk River to secure the conventional financing necessary fox the purchase of the building and improvements. The applicant proposes to use the micro loan fund for the portion of financing not covered by the bank loan and equity. The sources and uses of the project are as follows: First National Bank of Elk River $150,000 15-year @ 8.5%; 5-year balloon Secured by 1" position on mortgage EDA Micro Loan $ 50,000 15-year, @ 2%; 5-year balloon Secured by 2"`' position on mortgage Owner Equity Contribution $100 000 Total Project $300,000