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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 />November 24, 2020 <br />Prepared by <br />Colleen Eddy, Economic Development Specialist <br />Item Description <br />Morrell Companies Microloan Extension <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 Scott Morrell, LLC/Morrell Oversize (Morrell <br />Companies Jobs Incentive Microloan two-year extension request. <br /> <br />The Joint Finance Committee may recommend approval, approval with conditions, or denial of the request. <br /> <br />Background/Discussion <br />On July 20, 2015, the city approved a $200,000 Jobs Incentive Microloan as a short term loan with a 5-year <br />repayment term to Scott Morrell/Morrell Oversize (Morrell Companies). They have been paying the loan <br />pursuant to city policy over the past 5 years with a 2% interest rate. Final payment was due August 1, 2020. <br /> <br />The city received a request to extend the terms of the loan repayment by 2 years. Loan extensions are <br />authorized under the terms of the policy, subject to EDA and City Council approval. <br /> <br />To justify the extension, Mr. Morrell provided a letter from the Bank of Elk River stating the bank was unable <br />to match the current terms. Staff requested additional details from the bank to better understand the request. <br /> <br />Financial Impact <br />The request does not include additional funding from the city. If the extension is approved, it would <br />provide additional interest at 2% into the fund until the loan is paid in full. The extension would also <br />reduce available funds that could be used for other projects until the loan is paid in full. <br /> <br />Mission/Policy/Goal <br />The Joint EDA/HRA Finance Committee shall consist of two HRA Commissioners, two EDA <br />Commissioners, five members of the Elk River community consisting of two members of the banking <br />profession, one member of the legal profession, one member of the real estate profession and one member of <br />the community at large and acts in an advisory capacity to the Authority. <br /> <br />Attachments <br /> Baker Tilly Analysis <br /> Letter of Denial from Bank of Elk River <br /> Request for extension