6.1 EDSR 04-18-2016 - Laserfiche WebLink

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Request for Action ToItem Number Economic Development AuthorityFinance Committee4.2 Agenda Section Meeting DatePrepared by General BusinessMarch 29, 2016Amanda Othoudt, EDD Item Description Reviewed by Die Concepts, Inc.Jobs Incentive Microloan Cal Portner, City Administrator ProgramFinancial Application Review Reviewed by Action Requested Consider and provide recommendation to the EDA on the following Jobs Incentive Microloan application for Die Concepts, Inc.The Finance Committee may recommend approval, approval with conditions, or denial of the request. Background/Discussion The city received an application from Die Concepts, Inc.for a $200,000 Jobs Incentive Microloanand an HRA Blighted PropertiesCommercial/Industrial Forgivable Loan for $75,000 which will be reviewed by the HRA on April 4, 2016. The Jobs Incentive Microloan Program goal is to encourage the growth of new jobs and the retention of existing jobs. The company currently employs 12people with an average hourly wage of $26.50/hr., has outgrown their leased space in Ramsey, and intendsto relocate their operation to Elk River Analysis The attached memo from Springsted summarizes the analysis comple Staffs analysis is shown in bold, alongside the applied policy. Purpose: To assist existing businesses with expansion and attract new buscity whose local operations will expand the citys economy through job retention and creation and maintain/ grow the citys tax base. The purpose of the Jobs Incentive Program is to encourage the creation of quality, high-paying jobs within the city. Die Concepts will relocate 12 FTE, paying between $23-$29/hour, exclusive of benefits. Amount: Up to $200,000 of secondary financing not to exceed 20% of the p The total project cost is $926,000. The requested amount is 21.6% of the total project cost, which exceeds 20% of the maximum allowed. By policy, the maximum loan amount is $185,200. Equity: Must have private-sector commitments for 50% of the project cost. Borrower must provide 10% or more of project financing. The applicant indicated they will provide $110,200 as equity contribution to the project. Their equity will cover the relocation costs and remodeling blighted property in Elk River. The total contribution represents approximately 12% of project equity.