EDSR MEMORANDUM 04-13-1998 - Laserfiche WebLink

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EDA Agenda Memo April 9, 1998 Page 3 410 The EDA Finance Committeesupported unanimously a recommendation to the EDA to approve a $50,000 micro loan to The Ink Wizards with the following terms: • 8.5% interest rate, 5 year balloon, 20 year amortization • Second mortgage position on the land and building • Personal Guarantees • Promissory Note Recommendation Staff recommends support of the EDA Finance Committee recommendation to the approve the $50,000 micro loan to The Ink Wizards for relocation and expansion of their business operations. 7. Olde Main Micro Loan The EDA Finance Committee met on Tuesday, April 7, 1998, to consider a request by The Olde Main Eatery and Sweet Shoppe for modification of the $50,000 EDA micro loan. As explained by Char Barder and Margo Foster, The Olde Main is experiencing approximately $36,000 in cost overages,on their move into the former Dynamics Sports building. Due to this they have examined various other opportunities to come up with funds to cover these cost overruns. First National Bank of Elk River has tentatively agreed to provide a loan to The Olde Main in this amount if the EDA will consider subordinating its mortgage position on the land and building to allow the banks additional loan to precede the EDA micro loan. The structure of the loan under this scenario would be as follows: • $144,000 - first mortgage, First National Bank of Elk River • $ 36,000 - second mortgage, First National Bank of Elk River • $ 36,000 third mortgage position, EDA • $ 14,000 collateralized with furniture, fixtures, and equipment, EDA The Finance Committee discussed the issue of moving the EDA into a potentially riskier situation by subordinating their current mortgage position. Staff indicated a desire to see a new appraisal done on the building and First National Bank indicated that it is in process.