8.0. EDSR 12-10-2001 - Laserfiche WebLink

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• City of Elk River MEMORANDUM TO: EDA Finance Committee Members CC: Lori Johnson, Finance Director FROM: Catherine Mehelich, Director of Economic Developmen' DATE: November 2, 2001 SUBJECT: Micro Loan Application: MN Fabrication & Machine, Inc. The EDA Finance Committee will meet Monday,November 5, 2001 at 4:00 PM at Elk River City Hall to discuss the following: Issue • Staff has received a request by Don Millslagle,President of MN Fabrication&Machine, Inc. for a Supplemental Micro Loan in the amount of$50,000 to be used for equipment purchase and remodeling of the former Industrial Hardfacing, Inc. building located on Twin Lakes Road. The loan is proposed to be structured as a participation loan with the First National Bank of Elk River. Background Minnesota Fabrication &Machine, Inc. (MF&M) is a newly formed corporation by the owners of Industrial Hardfacing, Inc.(IHI). Industrial Hardfacing has had a long presence in Elk River rebuilding and manufacturing new parts for mechanical pressing, grinding, extruding and expanding equipment of the rendering and packing industries. IHI owns a 21,000 square foot facility in Elk River, and also has facilities in Lamoni, Iowa. Recently, IHI has made a strategic decision to relocate and consolidate the Elk River corporate office &much of their operations to its Iowa facility in order to be closer to their major markets. Minnesota Fabrication&Machine, Inc. (MF&M) has been formed to allow IHI to retain a presence in Elk River. MF&M will continue to build components for IHI and will also develop contract manufacturing and specialty customers. The applicant proposes to use the micro loan funds to remodel the Elk River facility for providing approximately 8500sf of lease space, and to assist in the purchase of capital equipment. In a 1999 Business Retention &Expansion visit, IHI employed 28 full-time with an average wage of$12.50/hour. With the move of some operations to Iowa,MF&M has retained 15