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**ITEM 3.13.** <br /> <br />,ity of <br /> <br />MEMORANDUM <br /> <br />iver <br /> <br />Mayor & City Council <br /> <br />F~ROM: <br /> <br />Paul T. Steinman, Director of Economic <br />Development <br /> <br />DATE: <br /> <br />March 17, 1997 <br /> <br />SUBJECT: Business Incubator Project Financing <br /> <br />Issue <br /> <br />The Business Incubator Project was recently approved by the EDA to proceed <br />with a two year lease commitment with Larry Hickman starting on April 15, <br />1997. The source of funds which has been identified for use on this project is <br />the Tescom DTED loan payments. You will likely recall that the city was <br />provided a grant of $250,000 from Federal and State Community <br />Development Block Grant funds, and in turn the city loaned these funds to <br />Tescom to complete an expansion project in 1994. Payments totaling <br />approximately $90,000 have been made to date by Tescom. Staff has worked <br />with the Department of Trade and Economic Development to develop a plan <br />to utilize these funds for the Business Incubator Project. <br /> <br />The Tescom loan payments are being provided into a fund which is formally <br />controlled by the city rather than the EDA. Given that the EDA has <br />approved the financing for this project through the use of these funds, it <br />would be appropriate at this time for the City Council to agree to allow the <br />EDA to use the Tescom loan repayment fund for this purpose. Since this <br />fund can only be used for eligible economic development activities which meet <br />certain criteria, it would be appropriate for the City Council to authorize the <br />EDA's use of these funds not only for the Business Incubator Project <br />financing, but other future economic development related projects as <br />determined appropriate by the EDA. <br /> <br />Action Requested <br /> <br />Staff recommends the City Council authorize use of the Tescom loan <br />payments (DTED Loan Fund) for use as a financing mechanism for the <br />Business Incubator Project and other future economic development projects <br />which are determined by the EDA to meet the criteria established for reuse of <br />these funds. <br /> <br />s:\councilXbusincfi.doc. <br /> <br />13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br /> <br /> <br />