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v <br /> v <br /> ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY <br /> 410 DATE JUNE 9, 1993 <br /> TO: ECONOMIC DEVELOPMENT AUTHORITY <br /> SUBJECT: LOAN REQUEST FROM INDY LUBE, INC. <br /> INTRODUCTION <br /> On Monday, June 7, 1993, the EDA Finance Committee met to <br /> review a request from Indy Lube, Inc. , an Indianapolis-based <br /> company, The following Committee members were in attendance: <br /> Jim Simpson, Bill Birrenkott, Tom McNair, and Bud Houlton. <br /> Following a presentation by company President and Founder, Mr. <br /> Jim Sapp, the Committee recommended approval of a loan to Indy <br /> Lube to be repaid over a fifteen year period. The Committee's <br /> recommendation was subject to the following condition: <br /> That the total loans for this project not exceed ninety <br /> percent (90%) of the project costs, or, ninety percent <br /> (90%) of the estimated Fair Market Value of the project <br /> • following its completion. In either case, the EDA' s loan <br /> should not exceed $32,500 . <br /> Pursuant to the loan policy guidelines, total loans cannot <br /> exceed 90% of the estimated market value of the project upon <br /> its completion. As the Elk River loan is currently proposed, <br /> the total loans (primary lender, SBA debentures, and EDA loan) <br /> is at 92% . This effectively reduces the EDA's participation <br /> from $32,500 to $24,700. If an as-built appraisal can <br /> demonstrate a higher finished market value, the EDA' s <br /> participation can be increased, not to exceed $32,500. <br /> In addition, the initial interest rate on the EDA's loan will <br /> be at the current prime rate (6%) . This rate will be adjusted <br /> every six months over the 15 year repayment period <br /> BACKGROUND <br /> Enclosed is a copy of a June 3, memo on the Indy Lube loan <br /> request that was sent to the Finance Committee. The EDA loan <br /> will be used by Indy Lube to supplement other financing sources <br /> to construct and equip a new 2, 100 square foot oil change <br /> facility at 5th Street and Dodge Avenue NW. The cost of <br /> acquiring the site, constructing the new facility, and <br /> equipping it, is estimated at $380,500 Primary financing is <br /> committed through Security Bank of Albert Lea which has <br /> • structured this project as an SBA 504 loan. Security Bank is <br /> also participating in the Rochester and Austin projects . All <br /> three projects have been packaged under one application to the <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 <br />