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Request for Action To Economic Development Authority Finance Committee Item Number 4.1 Agenda Section General Business Meeting Date October 27, 2015 Prepared by Amanda Othoudt, EDD Item Description Ethanol Technology of Minnesota, LLC Reviewed by Cal Portner, City Administrator Reviewed by Action Requested Hear update regarding Ethanol Technology of Minnesota, LLC., and provide a recommendation to the EDA to proceed with the collection of the debt. Background/Discussion In August 2008, the EDA approved a Micro Loan in the amount of $74,000 for Ethanol Technology of MN, LLC to assist in the purchase of equipment and complete remodeling for the expanded business venture. The term of the loan is a 10-year amortization; 5-year balloon payment. The rate was fixed at 3%. The loan was secured by a 2nd position lien on equipment, inventory, accounts receivable, real estate and personal guarantee. In addition, the company was required to create 7 fulltime positions at $15/hour wages within 2-years. The Micro Loan was structured as a participation loan with First National Bank of Elk River. The balance due on the EDA loan is $66,729.66. At the September EDA Finance committee meeting, staff was directed to have our legal counsel provide an updated cost estimate to collect the debt owed by Ethanol Technology of Minnesota, LLC. Staff is requesting a recommendation from the Finance Committee to the EDA to begin legal action in an effort to collect the debt owed by Ethanol Technology of Minnesota, LLC. Financial Impact The estimated cost to collect the debt from the borrower would range upward of $2,500 to $3,000. Attachments  EDA Finance staff memo dated June 23, 2014  EDA Finance staff memo dated September 22, 2015  Campbell Knutson letter dated October 5, 2015  Draft Notice of Default to Ethanol Technology of Minnesota, LLC  Draft Notice of Default to Barton C. Wells  Draft Notice of Default to Hitech Motorsport, Inc.