6.10 EDSR 01-21-2014 - Laserfiche WebLink

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City of Elk River, Minnesota Sportech, Inc.Application Review January 15,2014 Page 5 The company has requested financial assistance of$111,115 and plans to finance the remaining project costs of$151,933. The ratio of private to public funds is 1.36:1. 57%of the project costs will be financed with private dollars which meets the minimum criterion(50%)of the City's policy. 2. Sufficient cash flow to cover proposed debt service as demonstrated by financial statements and projections. The applicant has indicated that it will finance the remaining project costs internally. Based on our review of the financial statements, the company has the ability to finance the private costs of$151,933. The company's financials show projected revenues from operations being sufficient to finance annual operating expenditures of the company. 3. Ability to demonstrate positive net worth It is important to note that the latest financial statements provided by the company are for the year ending December 31, 2012 and as such this determination is being made based upon the available information at that time. Based upon a review of the financial information submitted by the company, Sportech has a positive net worth as of December 31,2012. 4. Letter of commitment from applicant pledging to complete the project during proposed project duration. In a letter dated December 26, 2013 the applicant states: 'I confirm and commit to the completion of a Sportech Customer Innovation Center to be located at 10800 179h Ave. NW, Elk River, Minnesota. The estimated cost of the project is approximately$230,000 and the final completion date will be on or before June 30, 2014': The estimated costs of$230,000 include only hard construction costs and do not include soft costs of approximately$33,000 associated with the project. As a result the applicant has supplied appropriate information indicating project completion and a copy of that letter is included with this memo. 5. Letter of commitment from other financing sources stating terms and conditions of their participation. The applicant plans to finance the private share of project costs with existing funds and will not be seeking financing through a lender. 6. Sufficient collateral The applicant has indicated in follow up phone conversations that the company owner is willing to provide a personal guarantee for the forgivable loan. Based on the applicant's representations regarding the value of real estate holdings and net worth illustrated in the financial statements provided to Springsted at the time of the review in December 2013 and January 2014, the applicant currently has a total net worth, comprised of liquid and non-liquid assets,greater than the loan and equity amounts required for the proposed project.