5.3. SR 03-24-2003 - Laserfiche WebLink

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TO: FROM: DATE: SUBJECT: MEMORANDUM Economic Development Authority Catherine Mehelich, Director of Economic Developmen~7~/~ March 10, 2003 MN Investment Fund Grant Application - Sportech Expansion Issue The City Council has authorized staff to submit a MN Investment Fund grant application to the MN Department of Trade & Economic Development (DTED). The grant funds will be used to provide a loan for the Sportech, Inc. expansion project. The DTED funds are part of the Small Cides federal funds. The use of the federal funds requires the City to meet federal program requirements, such as completing an environmental assessment, and providing benefit to lo,v-moderate income. If the City retains the repayment of the funds, after loaning to a business, the funds retain the federal designation and guidelines forever. Completing the federal program requirements for each re-use of the funds can be often times unnecessary and me-consuming to a project. The City can avoid the federal program requirements on the reuse of the funds by requesting authorization to transfer federal Small Cities funds to a Local Development Organization (LDO), such as the EDA or HRA. The request must be made by resolution of the City Council and submitted to DTED for approval. The federal requirements would have been met on the f~rst loan to business, Sportech, so the LDO would not have to comply with federal requirements on the reuse. DTED asks that the LDO utilize policies and procedures for the reuse of funds for similar activities, but without the federal requirements attached. No further reporting is required to DTED. Recommendation Staff recommends that the EDA request that the City Council consider making a request from DTED to designate the Elk River Economic Development Authority in the City of Elk River as a Local Development Organization (LDO), and authorize the EDA to receive the repayments from the MN Investment Fund SCDP Set-Aside loan to Sportech, Inc.