4.10 SR 12-21-2020 - Laserfiche WebLink

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Request for Action To Item Number Mayor and City Council 4.10 Agenda Section Meeting Date Prepared by Consent December 21, 2020 Colleen Eddy, Economic Development Specialist Item Description Reviewed by Morrell Companies Microloan Extension Cal Portner, City Administrator Reviewed by Action Requested Adopt, by motion, the resolution approving the amendment of loan terms for Scott Morrell, LLC. and authorization to execute the amended loan documents. Background/Discussion At the December 21, 2020, EDA meeting, the EDA approved the resolution to extend the loan terms for Scott Morrell, LLC's Microloan. On July 20, 2015, the city approved a $200,000 Jobs Incentive Microloan as a short-term loan with a 5-year repayment term to Scott Morrell/Morrell Oversize (Morrell Companies). They have been paying the loan pursuant to city policy over the past 5 years with a 2% interest rate. Final payment was due August 1, 2020. The city received a request to extend the terms of the loan repayment by 2 years. Loan extensions are authorized under the terms of the policy, subject to EDA and City Council approval. To justify the extension, Mr. Morrell provided a letter from the Bank of Elk River stating the bank was unable to match the current terms. Staff requested additional details from the bank to better understand the request. The information was presented to the Joint Finance Committee at the November 24, 2020 meeting, where they recommended approval of the extension request. Financial Impact The request does not include additional funding from the city. If the extension is approved, it would provide additional interest at 2% into the fund until the loan is paid in full. The extension would also reduce available funds that could be used for other projects until the loan is paid in full. Mission/Policy/Goal 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. Attachments ■ November 24, 2020 Joint Finance Committee Packet The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional,` 01 e service, and community engagement that encourages and inspires pi ospei l_ y INAWRE1