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• MEETING OF THE ELK RIVER ECONOMIC DEVELOPMENT <br /> AUTHORITY FINANCE COMMITTEE <br /> HELD AT THE ELK RIVER CITY HALL <br /> TUESDAY,AUGUST 6, 1996 <br /> Members Present: Jim Simpson, Bud Houlton,Tom McNair,Tom Bender <br /> Members Absent: Lloyd Brutlag <br /> Staff Present: Paul Steinman, Director of Economic Development <br /> Others Present: Mike Mulrooney, Advance Resources; Jim Taylor, Jimichaeleen <br /> Mufflers, Inc. <br /> The purpose of the EDA Finance Committee meeting was to review a $50,000 micro loan <br /> request from Jimichaeleen Mufflers, Inc. Mr. Mulrooney provided a brief overview of the <br /> project,which is a franchise operation of the Midas Muffler shops. Jim Taylor's most <br /> recent project was completed in Coon Rapids. <br /> Mr. Mulrooney indicated that a SBA 504 loan was approved by the Central Minnesota <br /> Development Corporation and that several banks have also committed to project <br /> financing. The micro loan would be used to cover non-eligible 504 costs such as <br /> • franchise fees, FF&E, and working capital. <br /> Jim Taylor provided brief background information on his past experience in the muffler <br /> franchise business. His first year in Elk River he indicated he projects sales to be in the <br /> neighborhood of$400,000-500,000. <br /> Collateral for this loan would be a third position mortgage on the building and other <br /> assets of the business. Mr.Taylor indicated he is paying approximately$210,000 for the <br /> 36,000 square foot site, plus approximately$50,000-$60,000 for special assessments. <br /> Mr. Mulrooney discussed an interest rate on the micro loan of 8.25 percent,which is prime <br /> rate at this time, and a ten year term. <br /> Several questions were asked of the applicants regarding use of the micro loan funds <br /> and past history of Mr.Taylor and his other muffler franchise businesses. The applicants <br /> left the meeting at approximately 3:30 p.m. <br /> Discussion continued among the EDA Finance Committee members. Such discussion <br /> revolved primarily around Mr.Taylor's need for the$50,000 micro loan. EDA Finance <br /> Committee member Tom Bender had asked Mr. Taylor if he would pursue his project if a <br /> decision were made to deny this loan request. Mr.Taylor indicated he would likely <br /> pursue his project, but that it would require him to assume a greater degree of risk and <br /> up front financial involvement. Given this information, the EDA Finance Committee <br /> discussed the overall purpose of the micro loan in this case, given that the project would <br /> likely proceed without the loan. <br /> • <br />