7. EDSR 04-08-2013 - Laserfiche WebLink

Home Browse Search

b) Certificate of Good Standing from the Minnesota Secretary of State or other satisfactory evidence of good standing. g) Project compliance with all city codes and policies The Finance Committee will review the application and determine to what degree the applicant meets the guidelines. The Finance Committee will then make a recommendation to the EDA on the application. The EDA will consider the recommendation at its April 8th meeting. Orluck Industries Orluck Industries, a manufacturer of precision parts for aerospace, defense and medical devices, has been in its current location since 2007 when they employed 22 people. They currently employ 37 in their 25,000 square foot facility. Orluck Industries is proposing a 12,000 square foot expansion. They also plan to purchase new equipment as part of the project. Orluck is requesting$200,000 for their project which will induce $1,147,500 in private investment and create 6 new jobs at$19/hr. Orluck Industries' application scored 94 out of a possible 465 points on the Forgivable Loan scoring sheet. The scoring system was designed to distinguish preference among many applications,and the seemingly low score does not indicate a weak project. This project would score 40 on the tax abatement application which would qualify it as a"high" desirability. In addition to the scoring, the Finance Committee is asked to consider the application in terms of the following: Orluck Industries Breakdown a) Amount Requested: $200,000 b) Interest Rate: 3% c) Job Creation: 6 jobs at$19/hr.At least 51%will be awarded to LMI applicants. d) Job Retention—retain the jobs for a minimum of one year e) Financial Feasibility i) Private Funding —there will be$1,147,000 in private investment to$200,000 in public funds or nearly a 6:1 ratio. This is considered very good. ii) Letter of Commitment from applicant —Staff received a letter dated February 21st From Peter Orluck,President of Orluck Industries,committing to complete the expansion by September 30,2014. iii) Letter of commitment from other financing—Dan Haas of the Bank of Elk River submitted a letter on March 21 stating their commitment to the project. iv) Collateral—the city will seek a subordinate position on building and machinery. The city will also secure a personal guarantee. v) Certificate of Good Standing—As part of Orluck Industries'application, staff received a copy of its Certificate of Good Standing. Financial statements are available upon request,however considering the bank approval for this project staff does not believe it necessary to make this information public. FINANCIAL IMPACT The Forgivable Loan fund has a balance of$703,679. The financial impact of approving the loan would be$200,000. The borrower will pay all legal and filing fees at closing. ATTACHMENTS • Orluck Industries application and attached documents C:\Users\dhuebner\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\Q7RBTRKC\Action Requested-EDA Finance 3-29-13 Orluck.docx