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t11 Mein glad Rolm 763210637 <br /> FIRSTNATIONAL BANK of Elk River Elk Ither,61N 33330 Ka 763Ari3E00 111 wwwfobe,.row <br /> 49,2015 <br /> Amanda Othoudt <br /> Economic Development Director <br /> 13065 Orono Parkway <br /> Elk River,MN 55330 <br /> RE: Promo Products,Inc/19228 LLC <br /> Request for Extension <br /> Dear Ms.Othoudt <br /> As we had discussed,I am requesting Elk River FDA's consideration of a two-year extension of its loan to 19228, <br /> LLC that was originated in January 2011 to assist Promo Products,LLC relocation to the Elk River Industrial Park. <br /> This project utilized an existing facility to house this now addition to the City,creating new jobs and preserving real <br /> estate tax base. <br /> The company undertook this project during a very difficult time,economically. To help it preserve its working <br /> capital,the City agreed to provide funding to the project in a subordinated position,helping to leverage both the <br /> bank and the SBA 504 funding for the purchase. As agreed,it provided funding that could be included as equity <br /> contribution to the project. <br /> This note is scheduled to mature January 13,2016 and we arc requesting a two-year extension,as allowed by EDA <br /> Policy,to January 13,2018. The commercial markets seem to have reached bottom,but have not recovered to a <br /> point where a more conventional take-out option is yet viable. We remain hopeful that the additional time afforded <br /> by the extension will allow further recovery,as well as amortization of additional principal,to allow the company <br /> to repay the balance of this note,at that time. <br /> SBA 504 guidelines do not allow First National Bank of Elk River to roll this amount into its 1"mortgage note. <br /> Also,Bank guidelines don't allow us to refinance this note in a 3rd position behind the SBA 504 loan. Lastly,the <br /> company has enjoyed growth,but that growth requires working capital and utilizing its capital for paying off the <br /> EDA note would likely not be a prudent use of company funds. Therefore a 2-year extension of this note is <br /> recommended and warranted. <br /> I look forward to continuing our work with the City for this valued Corporate Citizen. Please let me know of any <br /> questions you may have. Thank you! <br /> Sincerely, <br /> 01 <br /> conard Kirscht <br /> Vice President <br /> Cc: Andy Isle, Promo Products. <br /> 4 (Lj':'�j� +1.;�:.Ai '`.�Ri ,? •V+1,.JS St1'kr.: `�.t ��A,r : -.� ''1il ai*J;'14�( -,V,E vv�e it f� ��Se U-i i'.jit,'A tiiefi-� St<F.700 1.+;x <br /> , i �•,)' j r��. ,.y i � .. -r0 uql�',Q*w+si .f✓ ,t .1 ' 1 1 Ie-- .,:5 n: i• - -•�- <br />