7.0. EDSR 05-12-2003 - Laserfiche WebLink

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EDA Finance Committee Meeting Minutes • Tuesday, April 29, 2003, 4:30 PM Elk River City Hall Committee Members/Staff x Cliff Lundberg Jim Simpson x Dan Tveite x Chris Carlson x Jeff Gongoll _Tom McNair x Paul Motin x Catherine Mehelich-Staff x Heidi Hall-Staff Consider Loan Extension Request— M&A Investments, L.L.C. Director of Economic Development, Catherine Mehelich presented a summary of the loan and request being made by Mark Rothfork of M&A Investments,L.L.C. for a 2-year extension of his Micro Loan. In March 2000 the EDA awarded a$50,000 at 7.75% Micro Loan to Mark&Alma Rothfork, owners of Ultra Image Powder Coating. The Rothforks own a multi-tenant building in the McChesney Industrial Park. The Micro Loan was used to expand the building. The loan was structured as a participation loan with First National Bank of Elk River. The balloon payment on this loan in the amount of$44,227.21 was due March 15, 2003. Prior to the due date Mr. Rothfork provided staff a written request for the EDA's consideration of a two-year extension. Mr. Rothfork's lender has submitted a letter • regarding its inability to refinance the micro loan portion at this time based on the loan to value. Staff has recently received Mr. Rothfork's submission of current financial statements. The Finance Committee is asked to review the request and provide recommendation to the EDA regarding the extension. Ms. Mehelich stated that Mr. Rothfork has indicated his intent to relocate his business,Ultra Image Powder Coating to a facility he owns in Big Lake due to space constraints in his Elk River building. She indicated that Mr. Rothfork intends to continue to own the Elk River building and lease to multiple light industrial tenants. Staff notified and invited Mr. Rothfork to attend the meeting but he was not present. The Finance Committee discussed the following issues related to the extension request: • Review of the letter of request from Mr. Rothfork, financial statements, and letter of denial from First National Bank of Elk River. The Committee directed staff to verify the bank's loan to value on the project;has there been a recent appraisal? • The objective of the Micro Loan Fund is to create,boost and retain manufacturing jobs in the City of Elk River. Although the original job creation goals have been met and exceeded by Mr. Rothfork and his current tenants, the original job creation goals established for the loan should be certified annually and maintained over the 2-year extension period. If the job and wage goals are not met the EDA may have the right to call the loan immediately due. The original job goals include the creation of 8 full time equivalent positions at a wage of$9.00/hour exclusive of benefits. Mr. • Rothfork would be asked to guarantee the job and wage goals on behalf of his new tenants.