7.0.EDSR 06-14-2004 - Laserfiche WebLink

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EDA Finance Committee Minutes Page 2 June 1,2004 • Mr. Motin excused himself from the meeting. Mr.Lundberg stated that he is concerned that the Finance Committee and EDA are being asked to consider awarding the$100,000 to finance a spec building. Mr. McNair mentioned that the Finance Committee and EDA approved a loan for the R&W building,which is a similar project. Mr.Lundberg asked about the interest rate differential between the Supplemental Program and the Industrial Incentive Program. Mrs. Steinmetz stated that the Supplemental Program is 1% below prime with a 2% floor and that the Industrial Incentive Program is 4%below prime with a 2% floor. Mr. Simpson stated that the Industrial Incentive Program criteria is not preventing industrial prospects from locating in the West Business Park,rather the lack of a joint marketing agreement between the City'and the private landowners is what is preventing industrial development. Mr. Simpson added that industrial prospects should be able to request loan funds without location provisions. THE FINANCE COMMITTEE RECOMMENDS THAT THE EDA CONSIDER ELIMINATING THE SUPPLEMENTAL MICRO LOAN PROGRAM AND THAT THE INDUSTRIAL INCENTIVE PROGRAM RATE CRITERIA BE CHANGED TO 2%BELOW PRIME WITH A 3% FLOOR. THE MOTION CARRIED 5-0. 3. Badger Ventures Micro Loan Application Discussion Committee members Mr. McNair and Mr. Simpson excused themselves from the discussion since The Bank of Elk River is financing a portion of the project. Mr. Carlson,Mr.Lundberg and Mr. King discussed the application. Mr. Lundberg stated that he would like a personal guarantee from the Badger Ventures owners and from Gradient Technology. Mr.Lundberg also stated that he would like the lease between Badger Ventures and Gradient Technology to specify a legal tie between the two companies. Mr. King inquired of any claw back provisions within the City's Business Subsidies Policy that will be held between the City and Badger Ventures. Mrs. Steinmetz stated that the company would have to repay the loan in full if job and wage goals were not met. Mr. King stated that he would like more provisions within the Business Subsidies agreement between the City and Badger Ventures. Mr.Lundberg concurred. The Committee suggested the following verbiage for a motion: The Finance Committee recommends that the EDA consider awarding Badger Ventures,LLC a$100,000 Industrial Incentive Micro Loan contingent upon the following: • Personal guarantee from the owners of Badger Ventures,LLC and Gradient Technology • A clear legal tie between Badger Ventures,LLC and Gradient Technology Since the Committee requested additional information (the City's Business Subsidies Policy) and due to a lack of a quorum,there was no action on the Badger Ventures request. Mrs. , Steinmetz stated that the Committee will have to consider the Badger Ventures application and motion for recommendation to the EDA at a later date.