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Item 8 . <br /> City of <br /> Elk . .. <br /> River <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> FROM: Catherine Mehelich, Director of Economic Developmen 4 <br /> DATE: November 12, 2002 <br /> SUBJECT: Business Finance Programs Update <br /> Attachments <br /> • Article "DTED revises Minnesota Investment Fund proposal",League of MN Cities <br /> 10/23/02. <br /> • MN Community Capital Fund Membership Update 11/6/02. <br /> • MN Investment Fund <br /> The MN Department of Trade and Economic Development (DTED) administers the MN <br /> Investment Fund,which provides low interest loans to new or expanding businesses via a <br /> grant to local units of government. DTED has been considering potential changes to the <br /> program due to legislative direction. The attached article summarizes the potential changes. <br /> In the past the City of Elk River has utilized programs such as the MN Investment Fund to <br /> leverage local funds provided for business development projects. DTED business finance <br /> programs were provided to both Roma Tool and Tescom. In both instances the City of Elk <br /> River has been able to retain a portion,if not all, of the grant funds as the loans are repaid. <br /> Repayment of the Tescom loan in particular has allowed the EDA to fund the Business <br /> Incubator Program. Staff will continue to monitor changes in DTED's program for the <br /> impact on future business development projects in Elk River. <br /> MN Community Capital Fund <br /> In July 2002 the City Council authorized its participation in the MN Community Capital <br /> Fund (MCCF) in the amount of$50,000. The city's membership level allows the city to <br /> originate loans up to $500,000. MCCF was required to raise $2.5-million from memberships <br /> by October 31, 2002 prior to activating the loan program. Upon the request of MCCF, staff <br /> recently issued a 90-day extension of the initial member enrollment period in order to give <br /> interested organizations more time to secure local approvals. As of the end of October <br /> membership commitments included 46 organizations and totaled just over$2-million. The <br /> • attached Membership Update provides a list of member communities/organizations. <br /> S:\EDA\MicroLoan\Nov02Update.doc <br />