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ITEM 8 <br /> tY14 <br /> TO: ECONOMIC DEVELOPMENT AUTHORITY <br /> iver FROM: WILLIAM RUBIN ED COORDINATOR <br /> IN <br /> DATE: JANUARY 8, 1993 <br /> SUBJECT: LOAN REQUEST FROM ALLEGIANCE <br /> REALTY <br /> INTRODUCTION <br /> On Thursday, January 7, 1993, the EDA Finance Committee met to <br /> review a request from Allegiance Realty, 823 Main Street, Elk <br /> River, Minnesota. The following Committee members were in <br /> attendance: Jim Simpson, Bill Birrenkott, Lloyd Brutlag, Tom <br /> McNair, and Bud Houlton. <br /> Following a presentation by the principals of Allegiance Realty <br /> (Carol Luukkonen, Donna Grover, and Marilyn VanPatten) the <br /> Committee recommended approval of this loan to the EDA <br /> Commissioners. <br /> BACKGROUND <br /> • Enclosed is a copy of a December 28, 1992 memo on the <br /> Allegiance Realty loan request that was sent to the Finance <br /> Committee. As indicated in the memo, the EDA loan will be used <br /> by Allegiance to supplement primary financing for the <br /> acquisition of an office condominium at 305 Main Street and for <br /> the purchase of a telephone system. The real estate portion of <br /> the loan, comprised of $21,500, will be amortized over a <br /> fifteen year period with the initial interest rate tied to <br /> prime, but adjusted every six months . The equipment portion of <br /> the loan, comprised of $6,000, will be amortized over a five <br /> year period with the initial interest rate tied to prime, but <br /> adjusted every six months . A mortgage will be filed against <br /> the real estate, and, there will be a U.C.C. filing for the <br /> equipment as well. In addition, personal guarantees from <br /> owners and spouses, plus a corporate promissory note, will be <br /> required. <br /> ACTION REQUESTED <br /> The EDA is asked to approve a $27,500 revolving loan to <br /> Allegiance Realty. The loan will be comprised of a real estate <br /> loan covering a fifteen year repayment schedule and an <br /> equipment loan which covers a five year repayment schedule. <br /> The initial interest rate on both loans will be six percent <br /> (the current local low prime rate) and this rate will be <br /> 411 adjusted semi-annually (at six month intervals) . <br /> 720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420 <br />