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ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> FROM: Paul T. Steinman, Director.of Economic <br /> Development <br /> DATE: November 5, 1997 <br /> SUBJECT: Agenda Memo for November 10, 1997, <br /> Meeting <br /> 5. Gregg Karnis Micro Loan Application <br /> Issue <br /> Greg Karnis was recently denied a $50,000 micro loan request by the <br /> EDA for partial financing of a restaurant in the Sax Food building. <br /> Since the October EDA meeting, when this action was taken, Mr. <br /> SKarnis has modified his loan proposal and bank participation in this <br /> project. His current request is in the amount of$35,000 amortized <br /> over a ten year period with a four year balloon payment. <br /> Background <br /> Mr. Karnis' modified loan request came before the EDA Finance <br /> Committee on Thursday, October 30, 1997. The recommendation from <br /> the Finance Committee at that meeting was for the EDA to deny Mr. <br /> Karnis' loan request based upon the retail/service type of use and a <br /> possible future redirection of micro loan funds to altogether eliminate <br /> the funding of these types of uses. This motion was supported 4-0. At <br /> the initial meeting of the Finance Committee, a similar discussion was <br /> held regarding the type of use and the City's strategic planning process <br /> which indicated a clear focus to industrial development and <br /> redevelopment, rather than the subsidization of retail/service uses in a <br /> non-redevelopment project. <br /> EDA action at its October meeting denied the loan application, <br /> however, members of the EDA asked that Mr. Karnis be given another <br /> • <br /> 13065 Orono Parkway • P. O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 • Fax (612) 441-7425 <br /> Equal Opportunity Housing and Equal Opportunity Employment <br />