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El REQUEST FOR ACTION• <br /> River <br /> To ITEM NUMBER <br /> Economic Development Authority Finance Committee <br /> AGENDA SECTION MEETING DATE PREPARED BY <br /> June 20,2013 Clay Wilfahrt,Assistant Director of <br /> Economic Development <br /> ITEM DESCRIPTION REVIEWED By <br /> Industrial Incentive Micro Loan Application,Preferred Powder Brian Beeman,Director of Economic <br /> Coating Development <br /> REVIEWED BY <br /> Jeremy Barnhart,Deputy Director <br /> Community Operations and <br /> I Development <br /> ACTION REQUESTED <br /> Consider Industrial Incentive Micro Loan application for Preferred Powder Coating and make <br /> recommendation to the EDA with conditions as outlined in staff report. <br /> BACKGROUND/DISCUSSION <br /> The purpose of the Industrial Incentive Program is to encourage industrial and high technology business <br /> development that supports the tax base and brings quality jobs to the city. <br /> Preferred Powder Company is an environmentally-sensitive metal powder coating company. They are <br /> currently leasing a 73,000 square foot facility in Rogers,Minnesota and employ 24 people. They are <br /> seeking$100,000 to help with the cost of constructing a 100,000 square foot facility in the city-owned <br /> Nature's Edge Business Center. Based on their application, Preferred Powder plans to add 8-10 new jobs <br /> at$15/hr. as a result of the project. The project will induce $6.8 million in private investment. <br /> Preferred Powder will receive approximately $4.5 million in private financing from Frist National Bank of <br /> Elk River and a commitment letter is attached to their application. They were also approved for a <br /> $200,000 forgivable loan, and they are applying for a total of$1,153,878 in Tax Abatement. <br /> In addition to the financial criteria that must be considered, the Finance Committee must also consider to <br /> what degree the applicant satisfies the criteria set forth in the Micro Loan Fund policies outlined below: <br /> Micro Loan Criteria- Energy Efficiency Improvement Program <br /> • Max. Loan Amount: $100,000 <br /> • Interest rate: Fixed at 3% <br /> • Equity: 10% or more of project <br /> • Term: Financing with a balloon payment in 5-years. The balloon payment must not be longer than <br /> the balloon payment of the participating bank. Loans may be amortized up to the following limits: <br /> 20-years on real estate uses; 10-years on equipment uses. <br /> rOIENER it <br /> NATURE <br />