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<br />Housing and Community Development Needs and Strategies
<br />Citizens should be given the opportunity to discuss the housing and community development needs, as
<br />well as possible ways to meet the needs listed below:
<br />· Public facilities (i.e., streets, water, sewer, etc.)
<br />· Public services (i.e., fire protection, library, etc.)
<br />· Housing (i.e., owner and renter, etc.)
<br />. Economic Development
<br />
<br />It should be noted that citizens, through the city's update of its Comprehensive Plan, have discussed the
<br />listed needs.
<br />
<br />Details of Proposed Proiect and Funding Request to DEED
<br />Local manufacturer, Sportech, Inc., designs, manufactures and markets high-quality plastic accessories
<br />for the powersports industry, including motorcycles, snowmobiles, ATV's, PWC and utility vehicles.
<br />Founded in 1993, the company has grown in its current location from 1 O,OOO-sf and 2 employees to
<br />60,000-sf and 60 employees. Sportech, Inc. wishes to complete its fifth expansion in Elk River with the
<br />construction of an 80,000-square foot new headquarters and state-of-the-art manufacturing facility to be
<br />located in the EDA's Northstar Business Park located at 17464 Tyler Street. In addition, Sportech, Inc.
<br />wishes to purchase machinery and equipment necessary to its expansion of operations.
<br />
<br />The company wishes to begin construction of the new facility in early May, with anticipated occupancy
<br />in October of this year. The purchase of equipment will be timed as appropriate to the availability of
<br />the new space.
<br />
<br />The project includes the following estimated costs and proposed financing:
<br />
<br />ESTIMATED COSTS
<br />
<br />Land
<br />Building construction
<br />Equipment
<br />Soft costs:
<br />Total
<br />
<br />$ 809,345
<br />$4,700,000
<br />$ 745,000
<br />$ 105.000
<br />$6,359,345
<br />
<br />PROPOSED FINANCING
<br />Bank financing
<br />Owner Equity
<br />Tax Abatement (City & County)
<br />EDA Micro Loan
<br />MN Investment Fund
<br />Total
<br />
<br />$3,450,000
<br />$1,500,000
<br />$ 809,345
<br />$ 100,000
<br />$ 500.000
<br />$6,359,345
<br />
<br />In accordance with the EDA's Micro Loan Fund terms, staff recommends the City Council consider
<br />establishing the following MN Investment Fund loan terms to Sportech, Inc.:
<br />
<br />Loan Amount:
<br />
<br />Loan Purpose:
<br />Term:
<br />
<br />Security:
<br />
<br />$500,000
<br />Equipment Financing
<br />10-year amortization at a fixed interest rate of 2-points below prime
<br />1 st lien position on the new equipment
<br />
<br />Sportech, Inc. currently employs 66 full-time positions. The company anticipates hiring, within 2-years
<br />of official building occupancy, up to 25 new full-time employees at a base wage of not less than
<br />$12.00jhour. In order to meet the federal objectives for the grant funds, Sportech, Inc. will be required
<br />to have a minimum of 51 % of the new positions be taken by persons of low-to-moderate income.
<br />
<br />S:\Industrial Siting\Sportech Expansion II\Memos\4.21.08 CC Action Requested MIF.doc
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