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�,�// <br /> Oty of <br /> Elk <br /> River <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> Mayor & City Council <br /> FROM: Catherine Mehelich, Director of Economic Development <br /> DATE: January 14, 2008 <br /> SUBJECT: Consider $25,000 Micro Loan to Nicole's Finishing Touch Salon <br /> Attachments <br /> • Staff report to Finance Committee dated January 4, 2008 (see previous agenda item) <br /> • Finance Committee Minutes dated January 8,2008 (see previous agenda item) <br /> • City of Elk River Micro Loan Fund Policy (see previous agenda item) <br /> • City Council Minutes dated December 17,2007 <br /> Issue <br /> On January 8th, the Finance Committee reviewed an application from Nicole's Finishing <br /> Touch Salon to the Downtown Business Revitalization Micro Loan Program. The program <br /> was originally established for the purpose of assisting existing downtown businesses during <br /> the construction period of the new buildings. The program was limited to businesses <br /> established in the downtown district as of April 10,2006. As stated in the past, the <br /> Downtown Business Revitalization Micro Loan Program should be considered"high risk" <br /> lending with the potential of not being paid back due to the flexible application requirements <br /> and limited underwriting review. The loans are secured only by personal guarantee of the <br /> business owner. <br /> Since Nicole's Finishing Tough Salon does not fit the"existing business" criteria the Finance <br /> Committee was asked to consider the business's unique circumstances and hardship as a <br /> result of the downtown construction as described in the applicant's attached letter. Prior to <br /> the application submittal,staff provided a brief summary of the request to the City Council <br /> at its December 17,2007 meeting,in which the Council indicated a willingness to consider <br /> the request with further review and recommendation by the Finance Committee and EDA <br /> (see attached Council minutes). <br /> The Finance Committee recommends that the EDA consider approval of the Nicole's <br /> Finishing Tough Salon request for a$25,000 Downtown Business Revitalization Program <br /> Micro Loan, and waiver of the "existing business" criteria for this applicant's specific <br />