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<br />The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional <br />service, and community engagement that encourages and inspires prosperity <br />Request for Action <br /> <br /> <br />To <br />Joint Finance Committee <br />Item Number <br />4.1 <br />Agenda Section <br />General Business <br />Meeting Date <br />June 26, 2018 <br />Prepared by <br />Amanda Othoudt, EDD <br />Item Description <br />Review Jobs Incentive Microloan Application for <br />Orluck Industries, Inc. <br />Reviewed by <br />Cal Portner, City Administrator <br />Reviewed by <br /> <br /> <br />Action Requested <br />Consider and provide a recommendation regarding a Jobs Incentive Microloan application for Orluck <br />Industries, Inc. <br /> <br />The Finance Committee may recommend approval, approval with conditions, or denial of the request. <br /> <br />Background/Discussion <br />The city received an application from Orluck Industries, Inc. for a $200,000 Industrial Incentive <br />Microloan. <br /> <br />Orluck Industries, Inc. is an aerospace manufacturer of seating, cargo, sensors, propulsion, and engine <br />parts. They also provide medical, locomotive, and manufacturing industry services. <br /> <br />Orluck was awarded $15 million in long-term agreements. Their annual income is $3 million and <br />engineering and prototype costs are $500,000. The requested loan is to fund the initial investment to <br />bring the new parts into production. <br /> <br />The company currently employs 54 people with a total payroll of $115,000 bi-weekly. <br /> <br />Analysis <br />Microloan Purpose: To assist existing business expansion and attract new businesses whose operations <br />will expand the local economy through job retention/creation and maintain/grow the tax base. <br />Orluck Industries, Inc. has committed to retaining 54 jobs and creating 10 new positions over the next two years with an <br />average wage of $24.65/hr. <br /> <br />Loan Amount: Up to $200,000 of secondary financing not to exceed 20% of the project cost. <br />The total project cost equals $500,000. The applicant requested $200,000 from the city representing 40% of the total <br />project costs. The Initiative Foundation has committed to providing $200,000 in project financing representing 40% of the <br />total project costs. The applicant indicated they will provide $100,000 as an equity contribution to the project representing <br />the remaining 20%. <br /> <br />Total secondary funding exceeds the threshold of 20% of the project costs per the policy.