7.3. SR 12-15-2014 - Laserfiche WebLink

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City of Elk River, Minnesota Stonesthrow Companies, LLC and Coin-Tainer Co., LLC Microloan Fund Application Review December 15, 2014 Page 2 Background The City of Elk River's Economic Development Microloan Fund Policy & Guidelines and Application was initially established to stimulate private sector investment into manufacturing and certain commercial facilities and equipment in order to create new jobs, boost productivity and retain existing jobs for local residents. The program was amended several times since implementation with the most recent approved amendment on November 17, 2014. The purpose of the recent amendment was to incorporate a 41h microloan fund program named Jobs Incentive Program. The purpose of the 41h program was to assist existing businesses with expansion and attract new businesses to the City to encourage the creation of high paying and qualify jobs to the city. The loan amount is up to $200,000 with a fixed interest rate of 2%. Funds may be used for those described in the Microloan Fund Policy including building construction, land acquisition, machinery,furniture,fixtures and equipment, renovation and modernization of buildings, exterior renovation of industrial buildings, public infrastructure and investment real estate. Funds may not be used for restaurants, retail businesses, casinos, or sports facilities. The applicant has indicated the Microloan Fund would be used to assist with acquisition of a commercial-industrial building in the City in which a large portion is currently leased to existing tenants. The applicant has requested the maximum amount available of$200,000 to assist with the acquisition. Approach Stonesthrow Companies, LLC has provided Springsted, through the City, with its microloan application and related materials. The goals of the City's Economic Development Microloan Fund program, as stated in the policy guidelines, is to provide low interest, long-term (i.e. greater than one year) loans as incentives for new industrial and commercial development within the City of Elk River and to encourage commercial and retail business owners in the Downtown District to rehabilitate their existing buildings. The following review will outline the loan eligibility criteria as presented in the Economic Development Microloan Fund Policy and identify if the applicant meets those guidelines. Springsted's initial 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, loan security and guarantee requirements, 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 microloan program and ability to proceed with the project and honor any commitment made to the City of Elk River. Project Eligibility Requirements under Jobs Incentive Program For a project to qualify under the Jobs Incentive Program of the City of Elk River Economic Development Microloan Fund policy an applicant must meet certain criteria: Must create one new full-time job for each $20,000 loaned, retain one new full-time job for each$10,000 loaned,or combination of retainage and creation to meet the requirements: According to the applicant, Stonesthrow Companies, LLC, Coin-Tainer Co., LLC plans to create 70 new_jobs and retain 26 current_jobs.