6.1 EDSR 07-21-2014 - Laserfiche WebLink

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Gty oERequest for Action per To Item Number Economic Development Authority 6.1 Agenda Section Meeting Date Prepared by General Business July 21, 2014 Brian Beeman, Directory of Economic Development Item Description Reviewed by Jobs Incentive Program - Microloan Jeremy Barnhart, Deputy Director, CODD Reviewed by Action Requested Consider terms for a fourth Micro Loan application policy and make recommendation to the Department of Employment and Economic Development (DEED). Background/Discussion At the June 23, 2014 EDA Finance Committee meeting, the committee reviewed a draft of the proposed Jobs Incentive Program, and identified changes to be incorporated by staff. Those changes have been completed and the draft is presented for formal recommendation to the EDA. With EDA support, the policy will be sent to DEED for their review. If DEED suggests changes, those changes will be made and resubmitted to the EDA for approval. The City Council will consider approving the final policy once recommended by the EDA. The proposed 4`h microloan (Jobs Incentive Program) will allow more flexibility and increase the dollar amount up to $200,000 of secondary financing not to exceed 20% of the project cost while requiring wages at a minimum of$15.00 per hour and job goals. Terms will be set with a 5 year balloon and may be amortized up to 20 years on real estate uses and 5 years on equipment. The borrower must create one new full-time job for each $20,000 loaned or retain one existing full-time job for each $10,000 loaned within 2 years. Creation and retention may be combined to reach the requested loan amount. E.g. Two full time jobs, plus one retained could receive a $50,000 loan. There is a 5 year location requirement and job creation goals shall not be double-counted in the case where multiple sources of public financing are requested. (e.g. Microloan and Tax Increment Financing). Reimbursable costs may include actual incurred city fees associated with the construction and/or development costs of the project, outstanding or pending assessments where a business is to be located, and relocation costs with the greater of$25,000 or 20% of total project costs. The microloan program is being funded through left over State DEED monies of approximately $407,083.95. This 4th microloan, though funded from a secondary source,will be incorporated administratively into the existing microloan policies. This is intended to ease administrative effort and increase clarity for the ultimate end user. P O / E R E I I C MATURE