8. EDSR 04-08-2013 - Laserfiche WebLink

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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 the application. The EDA will consider the recommendation at its April 86"meeting. Preferred Powder Company Preferred Powder Company is an environmentally-sensitive metal powder coating company. They are currently leasing a 73,000 square foot facility in Rogers,Minnesota and employ 24 people. They are seeking$200,000 to help with the cost of constructing a 70,000 square foot facility in the city-owned Nature's Edge Business Center. Preferred Powder plans to add 8-10 new jobs at$15/hr. as a result of the project. The project will induce $5.4 million in private investment. Preferred Powder's application scored 333 out of a possible 465 points on the Forgivable Loan scoring sheet. This project would score 44 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: Preferred Powder Breakdown a) Amount Requested: $200,000 b) Interest Rate: 3% c) Job Creation: 8-10 jobs at$15/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$5,414,000 in private investment to$200,000 in public funds or nearly a 27:1 ratio. This ratio is extremely good. ii) Cash Flow—According to the profit and loss statement provided by Preferred Powder,they have had a positive cash flow for each of the past four years. iii) Letter of Commitment from applicant —Staff received a letter dated March 11 From Dan Bosshart,Vice President of Operations of Preferred Powder committing to complete the expansion by November,2013. iv) Letter of commitment from other financing—Chad Vitzthum of First National Bank wrote a letter on March 14,2013 indicating that Preferred Powder demonstrates the ability to service debt payments on the proposed project. He anticipates that the SBA 504 will need to be utilized in conjunction with the forgivable loan and conventional financing. v) Collateral—the city will seek a subordinate position on building and machinery. The city will also secure a personal guarantee. vi) Certificate of Good Standing—As part of Preferred Powder's 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. N:\Departments\Community Development\Economic Development\EDA to move\Agenda\Year2013\4-8-2013\Action Requested-EDA Finance 3-29-13 PPC.docx