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¶1k <br /> y°fTO: ECONOMIC DEVELOPMENT AUTHORITY <br /> River FROM: WILLIAM RUBIN, ED COORDINATO <br /> N , <br /> DATE: APRIL 6, 1993 <br /> SUBJECT: LOAN REQUEST FROM TESCOM <br /> CORPORATION, INC. <br /> INTRODUCTION <br /> On Monday, April 5, 1993, the EDA Finance Committee met to <br /> review a request from Tescom Corporation, 12616 Industrial <br /> Boulevard, Elk River, Minnesota. The following committee <br /> members were in attendance: Jim Simpson; Bill Birrenkott; Bud <br /> Houlton; and Lloyd Brutlag (who arrived later in the meeting) . <br /> Following a presentation by Ed Cunnington, Vice President of <br /> Tescom, the Committee recommended approval of a $50,000 loan to <br /> Tescom to be repaid over a ten year period. Further, the <br /> Committee recommends that the interest rate for the loan be <br /> fixed for the first four years at the current prime rate (6%) ; <br /> the interest rate would be adjusted in the fifth year, but <br /> locked again for three years at the prevailing prime rate; this <br /> • adjustment would also occur for the final three years of the <br /> loan. <br /> BACKGROUND <br /> Enclosed is a copy of a March 31, memo on the Tescom <br /> Corporation loan request that was sent to the Finance <br /> Committee. The EDA loan will be used by Tescom to supplement <br /> other financing sources to construct and equip a new 28,000 <br /> square foot facility in the Industrial Park. Together with the <br /> DTED grant-City loan in the amount of $250,000, the $50,000 EDA <br /> loan will be used to assist the company with the purchase of <br /> machinery and equipment. <br /> As indicated in the March 31 memo, the cost of constructing the <br /> new facility, equipping it, and remodeling the existing <br /> facility, totals $2, 161,900 . Financing is coming from a <br /> variety of sources : Industrial Revenue Bonds, DTED-City loan, <br /> TIF, and Tescom' s primary lender - Norwest Bank. <br /> ACTION REQUESTED <br /> The EDA is asked to approve a $50,000 revolving loan to Tescom <br /> Corporation. The rate and term of the loan is structured <br /> pursuant to the Finance Committee' s recommendation. The loan <br /> • will be secured by the filing of a mortgage against the <br /> development site. <br /> RECOMMENDATION <br /> 720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420 <br />