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<br /> ITEM 11 .2 .
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<br /> : ', VER ECONOMIC DEVELOPMENT AUTHORITY
<br /> TO: INTERESTED PERSONS IN WRIGHT AND SHERBURNE COUNTIES
<br /> FROM: WILLIAM RUBIN, ECONOMIC DEVELOPMENT COORDINATO J
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<br /> DATE : JUNE 30, 1993 Uv
<br /> SUBJECT: JULY 15 LUNCHEON MEETING;
<br /> 504 CERTIFIED DEVELOPMENT COMPANY
<br /> Please be advised of a luncheon meeting (dutch treat) on
<br /> Thursday, July 15, at Russell ' s on the Lake, Big Lake,
<br /> beginning at 12 p.m. . Bob Heck, President of the Twin Cities
<br /> Metro Certified Development Company, and, Al Madsen, Director,
<br /> Twin Cities Metro CDC (also Economic Development Director, City
<br /> of Maple Grove) , will be in attendance to provide an overview
<br /> of Twin Cities Metro.
<br /> A potential alignment with Twin Cities Metro is being offered
<br /> as one of many options in providing SBA 504 loans to small
<br /> businesses in Wright and Sherburne counties . Twin Cities Metro
<br /> currently serves Hennepin, Scott, Carver, Dakota, Washington,
<br /> • and Ramsey counties . Its service territory excludes Anoka
<br /> County which is served by the Coon. Rapids Development Company.
<br /> The organization was formed in early 1990, and, despite its
<br /> short existence, it maintains approximately one hundred 504
<br /> loans in its portfolio. Enclosed with this memo are two loan
<br /> activity summaries . The summary dated September, 1992,
<br /> indicates that Twin Cities Metro closed forty of the eighty-six
<br /> 504 loans in Minnesota (46%) during fiscal year 92 (October 1,
<br /> 1991, through September 30, 1992) . The September, 1992 summary
<br /> also indicates that Twin Cities Metro had sixty-eight loans
<br /> totalling $22 .5 million in its portfolio. The second summary,
<br /> dated May , 1993, indicates that Twin Cities Metro had closed
<br /> on thirty-one of the fifty-nine 504 loans in Minnesota (52%)
<br /> from October 1, 1992, through May 31, 1993 . This summary also
<br /> indicates that Twin Cities had ninty-nine loans, totalling
<br /> $32 .2 million in its portfolio through May, 1993 .
<br /> Twin Cities Metro is a full service development company. That
<br /> is, given its loan volume activity, it has several loan
<br /> packagers on staff. As with other development companies, a fee
<br /> is charged for this loan packaging service. In contrast to the
<br /> Coon Rapids Development Company, Twin Cities does not subsidize
<br /> this packaging fee. Of note, however, a business can treat
<br /> this fee along with the origination fee, appraisal, and other
<br /> closing costs, etc . , as a deductible business expense over the
<br /> • life of a mortgage. With or without a subsidy, a business
<br /> writes off this expense as it would other loan expenses .
<br /> P.O. Box 490 • 13065 Orono Parkway • Elk River, MN 55330-1743• (612) 441-7420 • Fax: (612) 441-7425
<br /> Equal Opportunity Housing and Equal Opportunity Employment
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