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Item 7. <br /> • <br /> City or <br /> Elk <br /> River <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> CC: Lori Johnson, Finance Director <br /> FROM: Heidi Steinmetz, Assistant Director of Economic Development frS <br /> DATE: April I I, 2005 <br /> SUBJECT: Consider Call of Micro Loan: Display Solutions, Inc. <br /> Attachments <br /> • Letter from Bob Michalek of Display Solutions,April 5,2005 <br /> • Micro Loan Policy& Guidelines, Revised June 2004 <br /> • Subsidy Agreement document between Display Solutions and EDA <br /> • Background <br /> At its May 2004 meeting, the EDA approved a $50,000 Micro Loan per the recommendation <br /> of the Finance Committee to be used to purchase machinery and equipment necessary for <br /> Display Solutions to begin operations in Elk River. The company is a manufacturer of two <br /> product lines: store fixtures and point-of-purchase displays. The loan was approved with <br /> the following terms: <br /> • Personal guarantee from owners and spouses <br /> • Additional financing sources secured <br /> • Secured by 2nd lien position on equipment <br /> • Term: 3%interest, 10-year amortization, 3-year balloon payment <br /> • Structured as participation loan with American National Bank <br /> • Job performance agreement (7 full-time jobs @ no less than$12.00/hour within 2 <br /> years) <br /> Issue <br /> Bob Michalek of Display Solution has submitted the attached letter indicating that the <br /> company is in need of leasing 20,000 to 30,000 SF,which is currently not available in Elk <br /> River. The company is currently leasing 4,500 SF in the McChesney Industrial Park and has <br /> given notice to vacate the space by the end of April. Display Solutions would like to <br /> maintain their current term,which is 3%interest, a 10-year amortization, and a balloon <br /> • payment due in May of 2007. The company has remained current on the loan repayment. <br />