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FY 15 <br /> <br />ELIGIBLE APPLICANTS “Development Authorities”: <br /> Eligible applicants for this program are <br />statutory or home rule charter cities, economic development authorities, housing and redevelopment <br />. Note: Applicant must be the owner of the property at the <br />authorities, counties, or port authorities <br />time of the application or before disbursement of funds. <br /> <br /> <br />ELIGIBLE PROGRAM COSTS: <br /> The Demolition Loan Program can pay up to 100 percent of the <br />acquisition and demolition costs for a qualifying site. “Demolition costs” means the costs of demolition, <br />destruction, removal, and clearance of all structures and other improvements on the project site, including <br />interior remedial activities, and proper disposal thereof. As used in this subdivision, “structure” has the <br />Costs incurred before the loan is awarded are <br />meaning given it in section 116G.03, subdivision 11. <br />not eligible for payment <br />. <br /> <br />TERMS: <br /> Loans for acquisition and demolition costs may be made subject to the following terms and <br />conditions: <br /> <br /> <br />1.The agreement to repay the loan may be a general obligation of the development authority, payable <br />primarily from a dedicated source of revenue, or other security subject to review and approval by the <br />commissioner, and the development authority must deliver its bond or note to the commissioner, <br />along with an attorney’s opinion that security is binding and legal per bond counsel to secure the <br />loan; <br /> <br />2.The term of the loan may not exceed 15 years; <br /> <br />3.The loan shall bear interest at a rate equal to two percent, but interest will not accrue during the first <br />two years of the loan term. <br /> <br />4.The development authority shall make semiannual interest payments and annual principal payments <br />beginning in the third year of the loan until the end of the term; <br /> <br />5.The principal amount of a loan may not exceed $1,000,000; <br /> <br />6.Loan proceeds shall be disbursed for eligible demolition costs as incurred or paid by the borrower and <br />upon submission of invoices and other supporting documentation satisfactory to the commissioner; <br /> <br />7.An eligible borrower shall establish a dedicated source of revenue for repayment of the loan. <br /> <br />FORGIVENESS: <br />Thecommissioner may forgive principal of the loan and interest accrued but unpaid <br />thereon, if any, up to 50 percent of the original loan amount, not to exceed the costs of demolition, upon <br />completion of the redevelopment plan, if the project would otherwise have received grant funding in the <br /> <br />most recent semiannual grant round, based on the priorities in section 116J.575. <br /> <br />REQUIRED APPRAISALS OR ASSESSMENTS: <br />Land appraisals of the current (as-is) and expected <br />(pre-construction) value of the site are required so that DEED can determine the fair market value and <br /> <br />any business subsidy.Both appraisals must be done by an independent appraiser using accepted <br />appraisal methodology. In lieu of an appraisal, the applicant may use the current and projected assessed <br />values as determined by the local assessor. Values cannot be determined in any other manner. The value <br />of the property after the proposed development is completed is also requested. This estimate is generally <br />based on similar development projects in the city. <br /> Page iii <br />Redevelopment <br /> <br />