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• <br /> City of <br /> Elk -�-� <br /> River <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> FROM: Catherine Mehelich, Director of Economic Developmen?' <br /> DATE: March 10, 2003 <br /> SUBJECT: MN Investment Fund Grant Application — Sportech Expansion <br /> Issue <br /> The City Council has authorized staff to submit a MN Investment Fund grant application to <br /> the MN Department of Trade &Economic Development (DTED). The grant funds will be <br /> used to provide a loan for the Sportech, Inc. expansion project. <br /> • The DTED funds are part of the Small Cities federal funds. The use of the federal funds <br /> requires the City to meet federal program requirements, such as completing an <br /> environmental assessment, and providing benefit to low-moderate income. If the City <br /> retains the repayment of the funds, after loaning to a business, the funds retain the federal <br /> designation and guidelines forever. Completing the federal program requirements for each <br /> re-use of the funds can be often times unnecessary and time-consuming to a project. <br /> The City can avoid the federal program requirements on the reuse of the funds by requesting <br /> authorization to transfer federal Small Cities funds to a Local Development Organization <br /> (LDO), such as the EDA or HRA. The request must be made by resolution of the City <br /> Council and submitted to DTED for approval. The federal requirements would have been <br /> met on the first loan to business, Sportech, so the LDO would not have to comply with <br /> federal requirements on the reuse. DTED asks that the LDO utilize policies and procedures <br /> for the reuse of funds for similar activities,but without the federal requirements attached. <br /> No further reporting is required to DTED. <br /> Recommendation <br /> Staff recommends that the EDA request that the City Council consider making a request <br /> from DTED to designate the Elk River Economic Development Authority in the City of <br /> Elk River as a Local Development Organization (LDO), and authorize the EDA to receive <br /> the repayments from the MN Investment Fund SCDP Set-Aside loan to Sportech, Inc. <br /> • <br />