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7.0.EDSR 06-14-2004
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7.0.EDSR 06-14-2004
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City Government
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EDSR
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6/14/2004
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Consider Micro Loan Application: Badger Ventures,LLC(Gradient Technology) <br /> EDA—June 14,2004 <br /> Page 2 of 2 <br /> o Term: Add"Balloon payment must not be longer than balloon payment of <br /> the participating bank" <br /> o Criteria: Eliminate "Borrower must locate in the West Business Park" <br /> Badger Ventures Application <br /> On June 9,2004 the Finance Committee unanimously recommended that the EDA consider <br /> awarding Badger Ventures,LLC a$100,000 Industrial Incentive Program Micro Loan <br /> contingent upon and subject to proposed amendments to the Micro Loan Policy. <br /> The proposed use of the loan is to finance construction costs of a new 13,000 square foot <br /> light industrial/business park building in Elk River. The loan is proposed to be structured as <br /> a participation loan with The Bank of Elk River. <br /> A representative from Gradient Technology will be available at the EDA meeting to discuss <br /> the proposed project and answer questions. <br /> Recommendations <br /> Staff recommends that the EDA consider the suggested amendments to the Micro Loan <br /> Fund Policy regarding the following: <br /> • Criteria for the Industrial Incentive Program <br /> • Eliminate the Supplemental Micro Loan Program <br /> • All Micro Loans be consummated via a bank participation loan <br /> 111. <br /> Regarding the suggested additions to the bank participation loan agreement and the Business <br /> Subsidy Agreement, staff recommends that the EDA consider maintaining the current <br /> agreements. It is important that industrial financing incentives remain flexible while <br /> meeting, not exceeding, the MN Business Subsidy Law. <br /> Staff also recommends that the EDA consider approval of the application from Badger <br /> Ventures,LLC (Gradient Technology) for a $100,000 Industrial Incentive Program Micro <br /> Loan upon consideration of the proposed Micro Loan Policy amendments. The terms of <br /> the loan are as follows: <br /> Rate fixed, 2 points below prime with a 3% floor <br /> Term 15-year amortization,up to 5-year balloon payment <br /> Security Secured by 2"d position on the real estate,personal <br /> guarantee from owners and spouses <br /> Structure participation loan with The Bank of Elk River <br /> Job performance agreement to include 5 new full-time jobs in Elk River with <br /> (subsidy agreement) estimated wages ranging from$15-$75.00 within 2- <br /> years <br />
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