7.2. HRSR 04-04-2016 - Laserfiche WebLink

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City of Elk River, Minnesota Die Concepts Inc. March 23,2016 Page 2 funded publicly through the HRA Blighted Properties Forgivable Loan (8.1%) and EDA Jobs Incentive Microloan (21.6%). Project Costs Amount Sources Amount Land 80,000 8.6% Bank Loan 540,800 58.4% Buildings 320,000 34.6% Applicant Equity 110,200 11.9% Remodeling 526,000 56.8% HRA Blighted Properties 75,000 8.1% EDA Microloan 200,000 21.6% Total 926,000 Total 926,000 The Jobs Incentive Microloan Program has certain criteria that must be met. The maximum amount of financing that can be provided is up to$200,000 and cannot exceed 20%of the total project cost. As shown in the table above,the microloan request is currently over the 20%limit at 21.9%. With a project cost amount of$926,000 and 20%limit,the maximum loan amount that could be provided is $185,200. The Microloan requirements also include private-sector commitments of at least 50%and borrower financing of at least 10%. Both of those requirements would be met based on the provided debt and equity amounts(58.4%and 11.9%, respectively). Project Eligibility Requirements under Jobs Incentive Program For a project to qualify under the Jobs Incentive Program of the City of Elk River Economic Development Microloan Fund policy an applicant must meet certain criteria: • Must create one new full-time job for each$20,000 loaned,retain one new full-time job for each $10,000 loaned,or combination of retainage and creation to meet the requirements: • All new jobs must be created within 2 years and retained for the period of the loan: • Created and retained jobs must pay greater than$15.00 per hour or 150%of State or Federal minimum wages(whichever is greater): • Any loans shall meet the City of Elk River Business Subsidy Policy for the creation of new jobs as well as a 5 year location requirement: • Eligible costs must be used for costs related to job creation and retention: The application received by the City includes a requested loan amount of$200,000 with 12 jobs being created. The creation of 12 jobs would allow for up to$240,000 of a loan amount, and exceeds the maximum loan amount available of$200,000. In addition, the proposed project would bring the 12 new jobs into the City following purchase and renovation of the existing building and would be within the required 2 year period. The company will agree to retain the jobs within the City for the period of the loan. The average hourly wages of the 12 jobs range from$23-$29. The project as proposed with the job creation would meet the City's Business Subsidy Policy as the wages exceed the minimum of$15/hour plus benefits and the company will agree to stay in the City for at least 5 years. The microloan funds would be used to acquire and renovate the building which allows the company to locate within the City,bringing the jobs, and thus meeting the job creation requirements of the project.