7.0. EDSR 09-12-2005 - Laserfiche WebLink

Home Browse Search

Consider Micro Loan Application: Alliance Machine,Inc. EDA Finance Committee—August 17,2005 Page 2 of 2 Below is a current summary of the Affiance Machine project: Nature of Business Light, precision machining of plastic and metal components for national and international clients in the aerospace, medical, defense and computer industries City TRF Assistance $103,978 to Provo Enterprises,LLC who will lease the property to Affiance Machine, Inc. (50% of the land cost) TRF Years 10 (estimated) Building Size 18,000 SF Lot Size 2.84 acres to acoomodate a 10,000 SF expansion (see attached site plan) Jobs Retained 30 ($20 average hourly wage) Jobs to be Created 9 ($15 minimum hourly wage) Use of the Micro Loan Fund for this Project The applicant proposes to use Micro Loan funds to finance construction costs. The applicant has proposed that the EDA take a second position on the real estate. Below is a summary of the project costs and proposed financing: • Project Costs Land-2.84 Acres $207,956 (see attached TRF projection worksheet) Construction $963,400 (see attached construction statement) Total $1,171,356 Proposed Project Financing (see attached bank proposal for details): Bank Loan 1 $980,000 Bank Loan 2 $140,000 EDA Micro Loan $100,000 Total $1,220,000 Project "But For" Analysis Sid Inman of Ehlers &Associates (the City's financial advisor) completed the"But For" analysis for the use of TRF for this project and reported to the EDA on August 8th that the Affiance project met the "But For" test. Mr. Inman has responded to this question with the attached e-mail message indicating that the use of Micro Loan funds for this project would change the "But For" analysis and result in a recommendation to the EDA that less TRF be applied to this project.. Additional Information Each company that receives a business subsidy in the State of Minnesota shall be subject to a subsidy agreement with the City of Elk River,which includes reporting provisions and • requirements set forth by the MN Business Subsidy Law. The City's Business Subsidies Policy is attached.