6.1 EDSR 11-17-2014 - Laserfiche WebLink

Home Browse Search

hi _ Request for Action River To Item Number Economic Development Authority 6.1 Agenda Section Meeting Date Prepared by General Business November 17, 2014 Jeremy Barnhart,Deputy Director, CODD Item Description Reviewed by Jobs Incentive Program-Microloan Reviewed by Action Requested Approve by motion the Jobs Incentive Program,incorporating changes required of the Department of Employment and Economic Development (DEED). Background/Discussion In July, the EDA submitted a Jobs Incentive program to be funded by State Minnesota Investment Funds (MIF). DEED required two changes to the program, clarifying that the funds now, or funds to be received in the form on interest payments in the future,may not be used to support restaurants,retail, casinos, and sports facilities. The Jobs Incentive program will be the 4th Microloan offered by the EDA. The City Council will consider approving the final policy once recommended by the EDA. No other changes to the program are proposed. A brief summary: The proposed 4th microloan Gobs 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 leftover 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. INAJUREI ititl 11