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<br />REQUEST FOR ACTION <br /> <br /> <br /> <br />T O I TEM N UMBER <br /> <br />Economic Development Authority <br />A GENDA S ECTION M EETING D ATE P REPARED BY <br /> <br /> April 8, 2013Clay Wilfahrt, Assistant Director of <br /> <br />Economic Development <br />I TEM D ESCRIPTION R EVIEWED B y <br />Consider Forgivable Loan Application for Preferred Powder Jeremy Barnhart, Deputy Director, <br />Coating Community Operations and <br /> <br />Development <br />R EVIEWED BY <br /> <br /> <br /> <br />AR <br />CTION EQUESTED <br />Consider Forgivable Loan application for Preferred Powder Coating and recommend that City Council <br />approve the Forgivable Loan of $200,000 <br /> <br />B/D <br />ACKGROUNDISCUSSION <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 /> <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 /> <br />Preferred Powder Coating is a metal powder coating company out of Rogers, Minnesota. They are <br />seeking the forgivable loan to help with the cost of constructing a 70,000 square foot facility in the city- <br />owned Nautre’s Edge Business Center. Preferred Powder plans to add 8-10 new jobs to their existing 24 <br />jobs as a result of the project. The project will induce $5.4 million in private investment. <br /> <br />The Finance Committee recommends the EDA recommend City Council approval of the Forgivable <br />Loan for Preferred Powder Coating with the following terms and conditions: <br /> <br /> <br />$200,000 at 3% interest, 5 year term, 20 year amortization <br /> <br /> <br />EDA to secure personal guarantee <br /> <br /> <br />EDA to obtain subordinate lien position on building and subordinate lien on machinery financed <br /> <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, Preferred Powder Coating will need to complete their construction, create a minimum of <br />eight jobs, and retain them for one year. Five of the jobs must be awarded to Low to Moderate Income <br />employees. <br /> <br /> <br /> <br />