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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 29, 2022 <br />Prepared by <br />Brent O’Neil, Economic Development Director <br />Item Description <br />HRA Loan Proposal <br />Reviewed by <br />Joshua Mollan, Economic Development Specialist <br />Reviewed by <br /> <br /> <br />Action Requested <br />Provide, by motion, a recommendation to the HRA regarding the proposal received from Metro Plains <br />Management. <br /> <br />Background/Discussion <br />In 2006, the Elk River Housing and Redevelopment Authority (HRA) contributed to financing the <br />construction of Jackson Place mixed-use development in downtown Elk River. Among the support, the <br />City/HRA received a grant of federal CDBG funds administered by the State of Minnesota. In turn, that grant <br />of $400,000 was provided to the Jackson Place development in the form of a 30-year deferred loan. Then loan <br />is now more than 15 years towards maturity. One-percent annual compound interest is to accrue and be <br />payable at maturity. <br /> <br />Metro Plains, the developer-owner-borrower, has reached out to the city about settling the loan early. We are <br />seeking advisement and a recommendation from the Joint Finance Committee to bring to the HRA’s <br />upcoming meeting. The attachments include the borrower’s proposed terms for closing out the loan. <br /> <br />Should the committee and HRA find an early settlement of the agreement worth pursuing, staff would work <br />with the legal team to ensure that provisions from the original loan documents remain in compliance. Of note, <br />a condition of the loan was tier to an income requirement in that all 32 residential units must meet the federal <br />affordability standard at 50% area median income. The borrower has indicated that the provision would remain <br />in place for the original 30-year period. <br /> <br />Financial Impact <br />The borrower would provide $160,000 to terminate its loan from the HRA. <br /> <br />Mission/Policy/Goal <br />The goal of the HRA is to promote certain housing and redevelopment projects. <br /> <br /> <br /> <br /> <br />