05-10-1993 EDA MIN - Laserfiche WebLink

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. . . Economic Development Authority Meeting May 10, 1993 Page 2 the effect the shore land ordinance may have on the plan regarding the encroachment to the river. Chris Bulow reviewed the cost and financing of the proposed project. Mr. Bulow indicated that he is anxious to move ahead with the project and requested comments from the EDA regarding the proposal. He indicated that he is considering a completion date of April or June, 1994. Commissioner Gongoll indicated that he felt the proposal was a good use of the space. He further stated that there has been other developers interested in this site, however, no one has come forward at this time. Bill Rubin indicated that the EDA and staff have an obligation to the developer regarding the property. He suggested that the EDA consider offering some type of option to take the site off the market to give the developer the assurance he needs before he spends limited time and financial resources on the project. It was the consensus of the EDA to consider this at its next meeting. 7. Proposed Revisions to Loan Policy Guidelines Bill Rubin informed the EDA that two rev~s~ons are proposed to the EDA Revolving Loan Policy Guidelines. Bill Rubin explained that the first change deals with what occurs when a company relocates out of Elk River after a loan has been approved. He suggested offering the following language to revise the policy: "A loan shall become due and payable in full if a business relocates out of the City of Elk River prior to the maturity date of the EDA loan." Bill Rubin indicated that the second revision relates to the adjustment in the EDA's interest rate. He suggested the following revision to the Revolving Loan Fund Guidelines: "The interest rate may be adjusted at intervals that are mutually agreed to by the EDA and the business." Commissioner Duitsman indicated that he supports the repayment of the loan if a business moves out of town. However, he questioned the purpose of adjusting the interest rate. He indicated that this would not benefit the City as interest rates would never be adjusted upward, only downward, and therefore benefit the borrower. Commissioner Dwyer suggested tying the interest to the prime rate. Bill Rubin indicated that the reason for adding the language is to eliminate any notion by the borrower that the interest rate is locked over the life of the loan and, further, that it is not the intention to renegotiate the interest. Commissioner Duitsman indicated that he would not have a the language if the interest is negotiated up front development. Bill Rubin indicated the rate was disclosed documents. problem with at the time of in the loan PRESIDENT GONGOLL MOVED TO ACCEPT THE FIRST REVISION TO THE REVOLVING LOAN FUND POLICY GUIDELINES AS STATED IN THE MEMO TO THE EDA FROM BILL