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ilk _ Request for Action <br /> River <br /> To Item Number <br /> Economic Development Authority 6.4 <br /> Agenda Section Meeting Date Prepared by <br /> General Business July 20, 2015 Amanda Othoudt,EDD <br /> Item Description Reviewed by <br /> 19228,LLC (Promo Products) Industrial Incentive Cal Portner, City Administrator <br /> Microloan extension Reviewed by <br /> Action Requested <br /> 1. Open public hearing to consider comment on the proposed Industrial Incentive Microloan two-year <br /> extension request for 19228,LLC (Promo Products). <br /> 2. Following the public hearing, the EDA is asked to consider adoption of the attached Resolution <br /> authorizing a two-year extension to the maturity date of the note and loan agreement to 19228 LLC <br /> (Promo Products). <br /> Background/Discussion <br /> On January 13, 2011,the city of Elk River approved an Industrial Incentive Microloan in the amount of <br /> $30,000 in the form of an Industrial Incentive Microloan to Promo Products. The maturity date of the <br /> loan is coming due in January of 2016. <br /> The Finance Committee reviewed and recommended the EDA approve the extension request for Promo <br /> Products. <br /> The applicant has made efforts to refinance the loan as a condition of the Microloan Fund Program. <br /> First National Bank of Elk River was approached for refinancing and has been denied due to the loan <br /> position and current economic conditions. The microloan is subordinate to both the bank mortgage and <br /> SBA 504 loan. SBA 504 mortgage guidelines does not allow the bank to roll the microloan amount as a <br /> refinance into the first mortgage loan and bank guidelines do not allow the Note to be refinanced into <br /> third position behind the SBA 504 loan. <br /> The attached memo from Springsted summarizes the analysis completed to date. Mikaela Huot will be at <br /> the meeting to verbally support the analysis. <br /> Click here to enter financial impact. <br /> Attachments <br /> • Springsted Analysis (June 23,2015) <br /> • Letter of denial from First National Bank of Elk River (May 29, 2015) <br /> • Request for extension (May 29, 2015) <br /> • Resolution Authorizing a two-year extension <br /> [WERE . 11 <br /> NATURE <br />