EDSR MEMORANDUM 03-09-1998 - Laserfiche WebLink

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EDA Agenda Memo March 4, 1998 Page 3 Recommendation Staff recommends the EDA authorize execution of the Contract for Private Redevelopment by and between the Economic Development Authority in and for the City of Elk River and David P. Decker. Attachments • Contract for Private Redevelopment with David Decker 6. Consider David Decker$50,000 Micro Loan Request Issue Mr. David Decker has also submitted a request for a $50,000 micro loan as part of the overall financing package for his project. It is appropriate to consider this request at this time due to the fact that other necessary city and EDA actions regarding the tax increment request have already been considered. IPBackground The EDA Finance Committee met on Tuesday, March 3, to discuss the issues of the $50,000 loan request from Mr. Decker. Both David and Jeanette Decker were available at,this meeting in addition to Gary Santwire, representing the Deckers on this project. As explained by the Decker's and Mr. Santwire, the EDA micro loan will be used to cover part of the gap between what the bank has agreed to finance of the project and the equity to be invested by the Deckers. Total project costs are anticipated to be approximately $899,000. The Finance Committee supported a recommendation to the EDA that the $50,000 micro loan request by David Decker be approved with the following details: • 20 year amortization with a 5 year balloon • prime interest rate- currently 8.5% fixed for the 5 year balloon period • personal guarantees • collateral to be a second mortgage position on land and • buildings.