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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 Meeting <br />Item Number <br />4.1 <br />Agenda Section <br />General Business <br />Meeting Date <br />August 27, 2019 <br />Prepared by <br />Amanda Othoudt, ED Director <br />Item Description <br />Distinctive Iron, LLC Jobs Incentive Microloan <br />Application Review <br />Reviewed by <br />Cal Portner, City Administrator <br />Reviewed by <br /> <br /> <br />Action Requested <br />Consider and provide recommendation to the EDA on the following Jobs Incentive Microloan <br />application for Distinctive Iron, LLC. The Joint Finance Committee may recommend approval, approval <br />with conditions, or denial of the request. <br /> <br />Background/Discussion <br />The city received an application from Distinctive Iron, LLC requesting a $100,000 Jobs Incentive <br />Microloan. <br /> <br />The Jobs Incentive Microloan Program goal is to encourage the growth of new jobs and the retention of <br />existing jobs. The company currently employs 14 FT and 2 PT with an average hourly wage of <br />$18.80/hr., has outgrown their leased space on Industrial Blvd in Elk River, and intends to relocate their <br />operation to 15970 Jarvis Street NW, Elk River. <br /> <br />Analysis <br />Purpose: To assist existing businesses with expansion and attract new businesses to the city whose local <br />operations will expand the city’s economy through job retention and creation and maintain/ <br />grow the city’s tax base. The purpose of the Jobs Incentive Program is to encourage the <br />creation of quality, high-paying jobs within the city. <br />Distinctive Iron, LLC will retain 14 FT and 2 PT paying an average of $18.80/hour, <br />exclusive of benefits. They plan to create 5 FT jobs paying an average hourly wage of <br />$18.80. <br /> <br />Amount: Up to $200,000 of secondary financing not to exceed 20% of the project cost. <br />The total project cost is $1,530,000. The requested amount is 6.5% of the total project <br />cost, which is less than the 20% maximum allowed. <br /> <br />Equity: Must have private-sector commitments for 50% of the project cost. Borrower must provide <br />10% or more of project financing. <br />The applicant indicated they will provide $116,000 as equity contribution to the <br />project. In addition, Distinctive Iron will be purchasing $35,000 of new equipment. <br />The total contribution represents approximately 9.9% of project equity, just under the <br />10% requirement.