7.7. SR 04-18-2016 - Laserfiche WebLink

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Eof lk ,.,,. Request for Action ,.iVe To Item Number Economic Development uthonity Finance Committee 4.2 Agenda Section Meeting Date Prepared by General Business March 29, 2016 Amanda Othoudt,EDD Item Description Reviewed by Die Concepts,Inc.Jobs Incentive Microloan Cal Portner, City Administrator Program Financial 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 NEcroloan and an HRA Blighted Properties Commercial/Industrial Forgivable Loan for$75,000 which will be reviewed by the HRA on April 4,2016. The Jobs Incentive NEcroloan Program goal is to encourage the growth of new jobs and the retention of existing jobs. The company currently employs 12 people with an average hourly wage of$26.50/hr.,has outgrown their leased space in Ramsey, and intends to relocate their operation to Elk River Anal The attached memo from Springsted summarizes the analysis completed to date. Staff's analysis is shown in bold, alongside the applied policy. Purpose: To assist existing businesses with expansion and attract new businesses to the city whose local operations will expand the city's economy through job retention and creation and maintain/ grow the city's 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 project cost. 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.