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City Council Public Hearing on MIF Grant Application <br />For Sportech, Inc. Expansion <br />March 24, 2003 <br />Page 2 of 3 <br /> <br />Issues <br />At its February 18 meeting, the Elk River City Council authorized the submission of an application <br />to DTED on behalf of Sportech, Inc. A requirement of DTED is that a public hearing on the <br />matter be held prior to submission of the application. The public hearing is an opportunity for <br />citizens to discuss the following items: <br /> · Housing and Community Development Needs and Strategies <br /> · Details of the funding request to DTED <br /> <br />Housing and Community Development Needs and Strategies <br />Citizens should be given the opportunity to discuss the housing and community development needs, <br />as well as possible ways to meet the needs listed below: <br /> · Public facilities (i.e., streets, water, sewer, etc.) <br /> · Public services (i.e., fu:e 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 recently <br />discussed the listed needs. <br /> <br />Details of Proposed Project and Funding Request to DTED <br />Local manufacturer, Sportech, Inc., designs, produces and markets snowmobile and ATV <br />accessories. Sportech, Inc. wishes to complete its third expansion in Elk River with the construction <br />of a 20,000-square foot freestanding building to be located adjacent to its present facility located at <br />15703 Jarvis Street. in addition, Sportech, Inc. wishes to purchase machinery and eqmpment <br />necessary to its expansion of operations. <br /> <br />The company wishes to begin construction of the new facility as soon as possible, with anticipated <br />occupancy in July of this year. The purchase of equipment will be timed as appropriate to the <br />availability of the new space. <br /> <br />The project includes the following estimated costs and proposed financing: <br /> <br />ESTIMATED COSTS <br />Building Construction <br />Equipment <br /> <br /> PROPOSED FINANCING <br />$750,000 The Bank of Elk River $676,545 <br />$216,493 Owner Equity $ 89,948 <br /> MN Investment Fund $200,000 <br />$966,493 $966,493 <br /> <br />Totals <br /> <br />At its March meeting the EDA took action to recommend that the City Council consider <br />establishing the following MN Investment Fund loan terms to Sportech, Inc.: <br /> <br />Loan Amount: <br />Loan Purpose: <br />Term: <br />Security: <br /> <br />$200,000 <br />Equipment Financing <br />7-year amortization at an interest rate of 2% <br />1 ~t hen position on the new equipment <br /> <br /> <br />