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Item 6. <br /> II <br /> City of <br /> Elk -� <br /> River <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> FROM: Catherine Mehelich, Director of Economic Development <br /> DATE: April I I, 2005 <br /> SUBJECT: Consider Micro Loan Policy Waiver for Badger Ventures, LLC <br /> (Gradient Technology) <br /> Attachments <br /> • Participation and Subordination Agreement between the Economic Development <br /> Authority for the City of Elk River and The Bank of Elk River <br /> • Economic Development Micro Loan Fund Policy <br /> • Background <br /> In June 2004 the EDA awarded a $100,000 Micro Loan to Badger Ventures,LLC (Gradient <br /> Technology) in addition to $145,556 in tax abatement (tax rebate) assistance from the City <br /> and County for the construction of a 13,000 square foot building in the Elk River Business <br /> Park. The loan, subject to recent amendments to the EDA's Micro Loan Policy,will be <br /> structured as a participation loan with The Bank of Elk River. A participation loan allows <br /> for the central distributions and collection of funds by the project's primary lending <br /> institution. <br /> Issue <br /> In order to finalize the participation loan, a Participation and Subordination Agreement has <br /> been prepared by the bank outlining the terms of the EDA's interest in the loan. Staff has <br /> reached agreement with the bank on the attached Participation Agreement;however a <br /> section of the Agreement is inconsistent with a requirement in the EDA's recently amended <br /> Micro Loan Policy. Staff is requesting that the EDA consider waiver of a particular policy <br /> provision in this case. <br /> Analysis <br /> In June 2004 the EDA amended the Micro Loan policy to include the following provision <br /> under Section V. Micro Loan Fund Terms &Conditions, Item 1) Loan Structure: <br /> • <br />