Laserfiche WebLink
`KY of REQUEST FOR ACTION C <br />0 (� <br />Elk. <br />Q Lr <br />River <br />TO <br />ITEM NUMBER <br />Economic Development Authori T <br />AGENDA SECTION <br />MEETING DATE <br />PREPARED BY <br />April 8, 2013 <br />Clay Wilfahrt, Assistant Director of <br />Economic Development <br />ITEM DESCRIPTION <br />REVIEWED By <br />Consider Forgivable Loan Application for Alliance Machine <br />Jeremy Barnhart, Deputy Director, <br />Community Operations and <br />Development <br />REVIEWED BY <br />ACTION REQUESTED <br />Consider Forgivable Loan application for Alliance Machine and request that City Council approve the <br />Forgivable Loan of $200,000 <br />BACKGROUND /DISCUSSION <br />The attached staff report to the EDA Finance Committee dated March 29, 2013, and committee meeting <br />minutes provide background regarding the Forgivable Loan request. <br />The EDA passed the Forgivable Loan guidelines in February and set an initial application period of <br />February 15 through March 15. The program is designed to stimulate private sector investment, help <br />spur new construction, create and retain employment opportunities, and promote the sale of city -owned <br />property. Staff received three applications for the Forgivable Loan during the initial application period. <br />Alliance Machine currently occupies a 24,000 square foot facility in the city- developed Northstar Business <br />Park, and they are applying for the Forgivable Loan to help fund an 18,000 square foot expansion. The <br />expansion will bolster shipping and receiving capacity to build mass production capacity. The addition <br />will create six new jobs and induce $1.4million in private investment. <br />The Finance Committee recommends the EDA recommend City Council approval of the Forgivable <br />Loan for Alliance Machine with the following terms and conditions: <br />• $200,000 at 3% interest, 10 year term, 20 year amortization <br />• EDA to secure personal guarantee <br />• EDA to obtain subordinate lien position on building and subordinate lien on machinery financed <br />The loan will be forgiven upon completion of all of the goals and requirements set forth by the Forgivable <br />Loan Policy, and the jobs created as a result of the forgivable loan program are retained for a minimum of one <br />year. In this case, Alliance Machine will need to complete their expansion, create a minimum of six jobs, and <br />retain them for one year. Four of the jobs must be awarded to Low to Moderate Income employees. <br />P'0WEREB BV <br />`AAWR <br />