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Business Incubator Program <br /> Page 4 <br /> ill A stock barter transaction is anticipated to be an integral part of <br /> this project. As indicated on the attached "Business Incubator <br /> Concept" sheet, the landlord, Genesis Business Centers, and the <br /> EDA, would each barter stock with the individual businesses at a <br /> rate of$1.50 per square foot per year. The attached Business <br /> Incubator Concept is based upon the first full year (1998) of <br /> operation of the facility. <br /> 0 What are the potential funding sources for this project? <br /> Staff has been researching potential funding sources for this project <br /> other than the annual levy funds of the EDA. At the present time, <br /> staff has identified the two following alternative funding sources: <br /> • Micro Loan Fund Current Balance $255,563 <br /> • DTED Loan Fund Current Balance $ 75,420 <br /> As you are aware, the DTED loan fund contains recycled federal <br /> Community Development Block Grant funds, which were granted to <br /> the City of Elk River and, in turn, loaned to Tescom. This fund is <br /> increasing at a rate of approximately $2,500 per month from Tescom <br /> loan payments. <br /> Although the DTED loan fund may appear to be a good potential <br /> funding source, it also has the strictest requirements for use of any <br /> of the funding sources controlled by the EDA. This is due to the fact <br /> that the DTED loan fund is federal dollars. Business incubators are <br /> an eligible use of these federal dollars, but the project needs to meet <br /> one or more of the national objectives as identified below: <br /> • Benefit low and moderate income persons. <br /> • Correct slums/blight objective. <br /> After discussions with state officials responsible for administration <br /> of these federal dollars, it appears as though the business incubator <br /> project may be able to meet one or both of these national objectives. <br /> Simple modifications to the EDA micro loan fund guidelines would <br /> allow use of this funding source for the business incubator project. <br /> Staff will continue to research these and any other potential funding <br /> sources. <br /> Upon proceeding with this project, staff would recommend <br /> establishing an initial loan from one of the available funding sources <br />