4.5. SR 07-16-2018 - Laserfiche WebLink

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EOty1� ,.,�� Request for Action River To Item Number Mayor and City Council 4.5 Agenda Section Meeting Date Prepared by ConsentJuly 16, 2018 Amanda Othoudt,EDD Item Description Reviewed by Jobs Incentive 1Vlicroloan Application for Orluck Cal Portner, City Administrator Industries, Inc. Reviewed by Action Requested Approve,by motion, a resolution approving the Jobs Incentive 1Vlicroloan and authorize the execution of the microloan documents for Orluck Industries,Inc. Background/Discussion The city received an application from Orluck Industries, Inc. for a $200,000 Jobs Incentive Nlicroloan. They are an aerospace manufacturer of seating, cargo, sensors,propulsion, and engine parts. They also provide medical,locomotive, and manufacturing industry services and were recently awarded $15 million in long-term contracts. Their annual income is $3 million and engineering and prototype costs are $500,000. The requested loan is to fund the initial investment to bring the new parts into production. They employ 54 with a total bi-weekly payroll of$115,000. The Economic Development Authority held a public hearing earlier this evening to invite comments from the public. The Joint Finance Committee reviewed the application,financials and other supporting information and determined the applicant met the fundamental goals of the policy and recommended approval of the loan. Orluck commited to creating 10 new jobs over the next two years and retaining 54 existing jobs for the project and will be required to meet the requirements of the city's Business Subsidy Policy for the creation of new jobs, as well as a 5-year location requirement. Financial Impact The balance of the Jobs Incentive 1Vlicroloan Fund account is $224,100. The loan request of$200,000 is proposed to be amortized over 7 years at 3%interest. Funds in this account continue to revolve and payments are received regularly. The EDA will receive security interest on two pieces of equipment taking first collateral position on the Ziess Contura G2. This is a piece of inspection equipment with a fair market value of$100,000. Orluck received confirmation that their Canadian lender Ibex will release their 2nd priority status on the Okuma Genos M560V financed by the Bank of America. This piece of equipment has a fair market value of$145,000 and EDA would have a second position on this collateral. The Elk River Vision A PehoMing community 2a itb revolutionary and spirited resourcefulness, exceptional POWERED By service, and community engagement that encourages and inspires prosperity INAWRE1