11-13-1995 EDA MIN - Laserfiche WebLink

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Economic Development Authority ,Meeting November 1;3, 1995 Page 2 8. Consider a Loan Request from Frank and Jodv Galli (The Vault Hearth Baker'll Bil! Rubin, Executive Director stated Frank and Jody Galli (The Vauit Hearth Bakery) requested a micro loon in the amount of $50,000 to launch a gourmet bread bakery and coffee shop in the lower level of the Elk River Travel building located at 315 Jackson Avenue. Frank and Jody Galli would purchase the building and renovate the lower level of the building for The Vault Hearth Bakery. Elk River Travel agency will continue to operate and rent space. A two- bedroom apartment on the upper level would also provide monthly income for the Gallis. The $50,000 micro-loan would be used to help purchase the building and to help purchase the necessary equipment for the gourmet bread shop. The Gallis requested a $17.500 loan for the real estate and a $32,500 loan for the equipment. A fixed rate of 6 percent was requested for both loans. The Finance Committee voted 4-0 (with committee member Bud Houlton absent) to recommend approval of this loan at a fixed rate of 6 percent for 15 years for the real estate loan and 7 years for the equipment loan. President Gongoll thinks this is a good project and is glad that Mr. Galli is willing to become a downtown business owner, Commissioner Dwyer stated concerns regarding the proposed interest rate on the real estate loan. Frank Galli would like a 6 percent fixed rate for 15 years because of all the remodeling and code changes for the lower level of 315 Jackson Avenue. This amounts to more dollars than was expected. COMMISSIONER DWYER MOVED TO APPROVE A $32,500.00 EQUIPMENT lOAN TO FRANK AND JODY GALLI (THE VAULT HEARTH BAKERY) FOR A TERM OF 7 YEARS AT A FIXED RATE OF 6 PERCENT; PLUS A $17.500.00 REAL ESTATE LOAN FOR A PERIOD OF 15 YEARS WITH A FIVE YEAR BALLOON AT AN INITIAL INTEREST RATE OF 6 PERCENT FIXED; AT THE END OF THE FIFTH YEAR THE NEW INTEREST RATE Will NOT EXCEED 2.75 POINTS BElOW THE PRIME RATE AT THAT TIME. COMMISSIONER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 6-0. 11. Consider a Resolution Requestinq Central Minnesota Development Comoany Exoand its Service Territory to Include Sherbuf'le County Bill Rubin, Executive Director explained that the EDA is jn receipt ,of a request from the Centrcl Minnesota Development Company (CMDC), The CMDC is considering a service territory expansion to include Sherburne, Chisago. and Isanti counties and is seeking resolutions or letters of support from cities, banks and s'lioll business concerns. Bill Rubin further explained the background of a Certified Development Company (CDC) and its ability to package Small Eusiness Association loans.