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<br /> <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 /> <br /> <br />To <br />Joint Finance Committee Meeting <br />Item Number <br />4.1 <br />Agenda Section <br />General Business <br />Meeting Date <br />May 14, 2024 <br />Prepared by <br />Brent O’Neil, Economic Development Director <br />Item Description <br />Microloan Application Review – Heritage Millwork <br />Reviewed by <br />Joshua Mollan, Economic Development Specialist <br />Reviewed by <br /> <br /> <br />Action Requested <br />Consider and provide recommendation to the EDA on a microloan application received from Heritage <br />Millwork, Inc. The Joint Finance Committee may recommend approval, approval with conditions, or <br />denial of the request. <br /> <br />Background/Discussion <br />The city received an application from Heritage Millwork, Inc. requesting a $200,000 job incentive loan <br />from the EDA revolving loan funds. The funds in this program are seeded from a previous Minnesota <br />Investment Fund award through the state Department of Employment and Economic Development <br />(DEED). <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 70 employees in multiple locations, with 8 presently in Elk <br />River. The proposed Heritage consolidation of facilities in Elk River would result in all jobs being in Elk <br />River and the potential for job expansion opportunities as well. The average hourly wage is $32.41 per <br />hour for existing positions. The potential for six new positions would have an average wa ge of $23.00 per <br />hour. <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 program is to encourage the creation of quality, <br />high-paying jobs within the city. <br /> <br />Amount: Up to $200,000 of secondary financing not to exceed 20% of the project cost. <br />The total project cost is in excess of $21,000,000. The requested amount is <br />approximately 1%, 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.