6.1 EDSR 04-18-2016 - Laserfiche WebLink

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Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com DRAFT MEMORANDUM TO: Amanda Othoudt, Economic Development Director FROM: Mikaela Huot, Vice President/Consultant DATE: March 23, 2016 SUBJECT: Die Concepts, Inc. – Jobs Incentive Microloan Fund Application Review Summary The City of Elk River received a loan request from Die Concepts, Inc. (the applicant) through the Economic Development Jobs Incentive Microloan Fund for the maximum loan amount of $200,000. The applicant has also submitted an application for assistance through the newly created Housing and Redevelopment Authority Blighted Properties Forgivable Commercial/Industrial Loan Policy for $75,000. The project as proposed by the applicant includes the acquisition and clean up of an existing approximate 20,000 square foot industrial building including refacing the exterior, new windows, asphalt, doors, landscaping and roof. The interior would be completely gutted with new electrical and other renovations to meet the applicant’s needs. The project as proposed would allow for the occupancy and renovation of an existing vacant building in the City and would bring 12 new jobs to the City through business relocation. The applicant has indicated it also has future plans to increase sales and add jobs, due to additional space the newly renovated building would allow for. At the request of City staff, Springsted has undertaken a review of the company’s application and supporting financial materials to determine that, based upon the provided information, the applicant meets the guidelines as set forth by the City of Elk River’s Economic Development Jobs Incentive Microloan Fund policy. The purpose of this memo is to outline the financial components of the applicant’s request for assistance from the Jobs Incentive Microloan Fund Policy and Application, dated November 17, with a loan amount of $200,000. The table on the following page illustrates the projected sources and uses of funds for the proposed project as provided in the application. It also includes the percentage of project costs and funding sources to determine the funding sources meet the Jobs Incentive Program criteria. Based on the applicant’s initial request, approximately 70% of the funding sources would be provided privately through debt (58.4%) and equity (11.9%) with approximately 30%