6.1 EDSR 12-19-2016 - Laserfiche WebLink

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C' of � Request for Action River To Item Number Economic Development Authority 6.1 Agenda Section Meeting Date Prepared by General Business November 29,2016 Amanda Othoudt,EDD Item Description Reviewed by Industrial Incenrive Microloan Application for Cal Portner,City Administrator Heritage Millwork, Inc. Reviewed by Action Requested Approve,by motion,a$100,000 Industrial Incentive Microloan to Heritage Millwork, Inc. and authorize the President and Executive Director to execute the Loan Agreement and any Loan Documents to which the EDA is a party on. Background/Discussion The city received a financial application from Heritage Millwork, Inc. (HMI) requesting a$100,000 Industrial Incentive Microloan. The EDA Finance Committee reviewed the application and recommended approval of the loan request on November 29 in two separate motions. The first motion approved the request in accordance with the terms of the EDA's policy (10 year Am, 5 Year Balloon) and holding a 3rd lien position on the equipment in addition to requiring the applicant to provide personal and corporate guarantees. The second motion recommended approval of the loan request in accordance with the SBA terms specifically for this loan. The SBA's policy does not allow any lender to have preferential terms. The applicant has submitted a request to the SBA to make an exception to their policy,which would allow the EDA to follow the terms of their existing microloan policy. If the SBA denies the bank/applicant's request for an exception to their policy,the Committee would recommend approval up to a 10-year Am, 10-Year Balloon,holding a 3`d lien position on the equipment in addition to requiring the applicant to provide personal and corporate guarantees. The loan request of$100,000 is not considered a business subsidy according to Minnesota Statutes 116J.993 and therefore does not require a public hearing. Background HMI is located in Ramsey,MN and employ 57 full-time employees. They plan to keep their existing facility in Ramsey and will retain all 57 jobs at that location. They propose to purchase a 20,800 sf facility located at 15725 Jarvis and create five new full-time employees in Elk River. The facility will pre-finish their products and store products from Ramsey,allowing increased capacity in Ramsey. Products will be transported from Ramsey to Elk River for a pre-finished before a return to Ramsey for completion and shipment to the customer. rOIEREI al ATURE