EDSR MEMORANDUM 11-10-1997 - Laserfiche WebLink

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GLK "incorporated P.O. Box 111 • Elk River, Minnesota 55330 • 612-374-6706 October 22, 1997 Mr.Paul Steinman Director of Economic Development City of Elk River 13065 Orono Parkway Elk River, Mn. 55330 Paul, I,m writing this letter to you to inform you of some developments that have occured since I last sat in front of the finance committee review board for the EDA. First of all, The Bank of Elk River has reconsidered my loan application and decided to increase the loan amount for my project from$200,000 to$265,000. I consider this effort on their part to be a strong affirmation in the confidence of our restaurant endeavor. Secondly,since the Bank of Elk River decided to increase their loan amount to me,this decreases the amount of exposure the EDA has in our project by$15,000. Considering the entire project cost is$350,000, if The Bank of Elk River contributes $265,000 and I contribute my $50,000,this totals $315,000 which in turn brings the amount needed from the EDA from$50,000 down to $35,000.Considering the fact that The Bank of Elk Wver and myself are at the point where we have both contributed the amount that we can fully put into the oject, I now submit to you that we do have an actual gap of$35,000 that is needed to make Pattiniccio's Restaurant a reality in Elk River. Thirdly, I appreciate that First National Bank of Elk River is interested in my loan,but with all do respect, because of time constraints and a number of other factors involved in order to bring this project in at budget,I cannot afford to take the time it would take for me to get an approval from the SBA, which the powers at be said I would have to do in order for them to get involved in my project. The biggest risk in First National Bank's approach for me is that if I do spend the number of weeks involved in dealing with the SBA,not only do I delay the project for one to two more months,but if the SBA denies me their involvment,my loan with First National is all but over.It's also important to mention that the SBA will require more cash input than I can afford. Paul, at this point,I am asking that you bring my issue before the finance review committee once again especially in light of the things that have happened since we last met. My request is that I secure an EDA micro loan in the amount of$35,000 with payments to be amortized over a ten year period with a balloon payment due after four years. In closing, I hope this matter is resolved in a satisfactory fashion for all parties involved and finally we can get this project underway not only for myself,but for the City of Elk River which desperately needs a fine dining restaurant to compliment the way in which our city is growing. Respectfully, egg W. Karnis cc:EDA Finance Committee Review Board