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ITEM ~ 7. <br />ver <br />MEMORANDUM <br />TO: Economic Development Authority <br />FROM: Catherine Mehelich, Director of Economic <br />DATE: November 13, 2006 <br />Development /~ <br />SUBJECT: Consider Amendments to Micro Loan Policy -Downtown <br />Business Revitalization Loan Program <br />Attachments <br />• Downtown District (DD) Zoning Map <br />• Micro Loan Fund Policy & Guidelines, Amended May 2006 <br />Issue <br />The EDA is asked to review and provide feedback on the draft Downtown Business <br />Revitalization Loan Pxogxam. <br />Background <br />At the September 18, 2006 City Council meeting, the Mayor and Council directed staff to <br />prepare a draft loan ox giant program that would provide financial assistance to the <br />businesses in the downtown area. <br />Assistance Options <br />Staff researched other cities, including Hopkins, in which the officials stated no giant <br />programs have previously been offered to downtown businesses in their communities. <br />In addition, staff has discussions with the city's auditor and counsel regarding any legal issues <br />with respect to the City provided fmancial assistance in the form of a giant to businesses. <br />The auditor strongly recommended that the CitS~ has no statutory authority to provide grants <br />to businesses for their "hardship" as a result of a construction project. Statutorily giants <br />must include a fmding to benefit a specific public purpose. In addition, the offering of a <br />giant puts the city at risk on several issues, including precedence, boundaries, proof of <br />hardship, property owner equitability. <br />Based on the research regarding grants, staff drafted the attached Downtown Business <br />Revitalization Loan Pxogxam that may provide a flexible, simple, easy to access program that <br />would provide a specific type of benefit fox downtown businesses to assist their operations <br />