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City of <br /> )1* <br /> EI Request for Action <br /> River <br /> To 1 Item Number <br /> EDA Finance Committee 1 2.1 <br /> Agenda Section Meeting Date Prepared by <br /> General Business November 5,2013 Brian Beeman, Director of Economic <br /> Development <br /> kern Description Reviewed by <br /> Ethanol Technology Default Jeremy Barnhart,Deputy Director,CODD <br /> Reviewed by <br /> Action Requested • <br /> Consider Ethanol Technology default and make recommendation to the EDA. <br /> Background/Discussion <br /> In August 2008 the EDA approved a Micro Loan in the amount of$74,000 for Ethanol Technology to <br /> assist in the purchase of equipment and complete remodeling for the expanded business venture.The <br /> term of the loan was a 10 year amortization with a 5 year balloon at 3%. The loan was secured by a 2'' <br /> position lien on equipment,inventory, accounts receivable,real estate and personal guarantee.The loan <br /> was structured as a participation loan with First National Bank of Elk River.There last payment was <br /> February 25,2010. <br /> The company defaulted on its loan in 2010 and went bankrupt shortly thereafter.The First National Bank <br /> has written off this loan. The remaining balance is $66,729.66.The City of Elk River's Finance <br /> Department is asking that this loan be closed out by the end of 2013.The City's attorney has written a <br /> resolution to close out this account. <br /> Staff is asking that the Finance Committee make a recommendation to the EDA to write off this loan so <br /> that it can be closed out by the end of 2013. <br /> Financial Impact <br /> N/A <br /> Attachments <br /> ° Ethanol Technology Amortization <br /> A._ <br /> 'P 0 kY E R E U t ti <br />