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<br /> <br />MEMORANDUM <br /> <br />TO: Economic Development Authority <br /> <br />FROM: Catherine Mehelich, Director of Economic Development <br /> <br />DATE: November 13, 2006 <br /> <br />SUBJECT: Consider Amendments to Micro Loan Policy - Downtown <br />Business Revitalization Loan Program <br /> <br />Attachments <br />. Downtown District (DD) Zoning Map <br />. Micro Loan Fund Policy & Guidelines, Amended May 2006 <br /> <br />Issue <br />The EDA is asked to review and provide feedback on the draft Downtown Business <br />Revitalization Loan Program. <br /> <br />Background <br />At the September 18, 2006 City Council meeting, the Mayor and Council directed staff to <br />prepare a draft loan or grant program that would provide financial assistance to the <br />businesses in the downtown area. <br /> <br />Assistance Options <br />Staff researched other cities, including Hopkins, in which the officials stated no grant <br />programs have previously been offered to downtown businesses in their communities. <br /> <br />In addition, staff has discussions with the city's auditor and counsel regarding any legal issues <br />with respect to the City provided fmancial assistance in the form of a grant to businesses. <br />The auditor strongly recommended that the City has no statutory authority to provide grants <br />to businesses for their "hardship" as a result of a construction project. Statutorily grants <br />must include a fmding to benefit a specific public purpose. In addition, the offering of a <br />grant puts the city at risk on several issues, including precedence, boundaries, proof of <br />hardship, property owner equitability. <br /> <br />Based on the research regarding grants, staff drafted the attached Downtown Business <br />Revitalization Loan Program that may provide a flexible, simple, easy to access program that <br />would provide a specific type of benefit for downtown businesses to assist their operations <br />