4.6. SR 02-18-2003 - Laserfiche WebLink

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Consider bin Investment Fund Application Sportech, Inc. Expansion February 18, 2003 Page 2 of 2 The expansion project would involve finance participation from the company's lender, The Bank of Elk River. However, due to the bank's lending limits, additional sources of financing are necessary to allow the project to proceed. Staff and the company have explored utilizing the Minnesota Department of Trade & Economic Development MN Investment Fund as a financing source. The MN Investment Fund is a grant that is awarded to cities in order to provide loans to assist expanding businesses. The attached MN Investment Fund fact sheet provides additional details about the program. Staff's discussions with DTED regarding the Sportech, Inc. expansion indicates that the city could apply for up to $ 200,000 in federal grant dollars, ~vhich the city would then provide a loan in the same amount to the company toward equipment financing. As the loan is paid back to the city over a period of 7 to 10 years, the city is able to retain the full $200,000 to be used as a revolving loan fund for economic development purposes. The city was awarded a $250,000 MN Investment Fund grant for the Tescom project in 1994. The city utilizes a portion of the grant funds, as the loan is paid back from Tescom, to fund the city's Business Incubator program. Staff will be present at the City Council meeting to discuss details of the proposed MN Investment Fund grant application. In addition, Chris Carlson, CEO of Sportech, Inc., may be present at the Council meeting to answer any questions about the project. Recommendation Staff recommends that the City Council consider authorizing staff to proceed with an application to the DTED MN Investment Fund grant in the amount of $200,000 to assist with a loan for the Sportech, Inc. business expansion project.