6.3 EDSR 12-16-2013 - Laserfiche WebLink

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City of Elk River, Minnesota Sportech, Inc.Application Review December 4,2013 Page 2 Development Forgivable Loan Policy guidelines and identify if the applicant meets those guidelines. Springsted's determination that the applicant has fulfilled the necessary criterion is based upon the available information (application information and related materials provided by the applicant and the City) and the City's current policy guidelines. We have focused specifically on the project eligibility, eligible activities, business eligibility, and financial feasibility requirements as stated in the guidelines. The review is meant to provide a snap shot of the above referenced information and should be used as a tool to enable the City to form an opinion as to the applicant's suitability for the forgivable loan program and ability to proceed with the project and honor any commitment made to the City of Elk River. Note on Financials Sportech, Inc. has provided Springsted,through the City,with consolidated financial statements from the last two years. The consolidated statements include Sportech, Inc. and Envision Company, LLC. According to the notes to the financial statements, Envision Company, LLC shares common ownership with Sportech and is currently the lessor of Sportech's operating facility.The notes also state that Sportech, Inc. has guaranteed the debt of the building owned by Envision Company, LLC. Project Eligibility Requirements • The City's forgivable loan policy indicates that prior to the City granting a forgivable loan to a proposed business,that the proposed project must meet certain eligibility requirements.According to the City of Elk River's forgivable loan policy guidelines,a forgivable loan must be based on one of the following criteria(Criterion 6 or 7 must be accompanied by either 1,2,3,4 or 5.): 1. Creation of new jobs which meet the federal low to moderate income(LMI)guidelines and wage goals. At least 51%of the jobs created must be made available or held by LMI person(s); According to Sportech's application materials the company plans to employ an additional six to ten mechanical and design engineers with annual salary's ranging from$50,000 to$75,000. 2. Increase in tax base; According to Sportech's application materials the company plans to remodel its current facility through architectural redesign and additional industrial equipment. This remodel will increase the work force and production at the facility. 3. The project demonstrates that investment of public dollars induces private funds; According to Sportech's application materials the company expects that after receiving the forgivable loan • from the city that$757,933 of the approximately$263,088 in project costs will be financed privately.