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Elk REQUEST FOR ACTION <br /> River <br /> To ITEM NUMBER <br /> Economic Development Authority 8. <br /> AGENDA SECTION MEETING DATE PREPARED BY <br /> April 8, 2013 Clay Wilfahrt,Assistant Director of <br /> Economic Development <br /> ITEM DESCRIPTION REVIEWED By <br /> Consider Forgivable Loan Application for Preferred Powder Jeremy Barnhart, Deputy Director, <br /> Coating Community Operations and <br /> Development <br /> REVIEWED BY <br /> ACTION REQUESTED <br /> Consider Forgivable Loan application for Preferred Powder Coating and recommend that City Council <br /> approve the Forgivable Loan of$200,000 <br /> BACKGROUND/DISCUSSION <br /> The attached staff report to the EDA Finance Committee dated March 29, 2013, and committee meeting <br /> minutes provide background regarding the Forgivable Loan request. <br /> The EDA passed the Forgivable Loan guidelines in February and set an initial application period of <br /> February 15 through March 15. The program is designed to stimulate private sector investment, help <br /> spur new construction, create and retain employment opportunities, and promote the sale of city-owned <br /> property. Staff received three applications for the Forgivable Loan during the initial application period. <br /> Preferred Powder Coating is a metal powder coating company out of Rogers,Minnesota. They are <br /> seeking the forgivable loan to help with the cost of constructing a 70,000 square foot facility in the city- <br /> owned Nautre's Edge Business Center. Preferred Powder plans to add 8-10 new jobs to their existing 24 <br /> jobs as a result of the project. The project will induce $5.4 million in private investment. <br /> The Finance Committee recommends the EDA recommend City Council approval of the Forgivable <br /> Loan for Preferred Powder Coating with the following terms and conditions: <br /> • $200,000 at 3%interest, 5 year term, 20 year amortization <br /> • EDA to secure personal guarantee <br /> • EDA to obtain subordinate lien position on building and subordinate lien on machinery financed <br /> The loan will be forgiven upon completion of all of the goals and requirements set forth by the Forgivable <br /> Loan Policy,and the jobs created as a result of the forgivable loan program are retained for a minimum of one <br /> year. In this case,Preferred Powder Coating will need to complete their construction,create a minimum of <br /> eight jobs,and retain them for one year. Five of the jobs must be awarded to Low to Moderate Income <br /> employees. <br /> PUIENE ! Ir <br /> NATURE <br />