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The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br /> <br />Request for Action <br /> <br />To <br />Economic Development Authority <br />Item Number <br />7.3 <br /> <br />Meeting Date <br />August 19, 2024 <br />Prepared By <br />Brent O'Neil, Economic Development Director <br /> <br />Item Description <br />Subordination Agreements - Loan to Heritage <br />Millwork <br />Reviewed by <br />Cal Portner <br /> <br />Action Requested <br />Approve, by motion, a resolution subordinating the EDA loan to Heritage Millwork in favor of First Bank Elk <br />River and the Twin Cities-Metro Certified Development Company (TCM). <br /> <br />Background/Discussion <br />The EDA authorized a loan in the amount of $200,000 to Heritage Millwork, Inc. on June 17, 2024. This loan <br />is part of the overall financing of Heritage's investment in a new Elk River facility, in which the project is <br />receiving financing through First Bank, TCM and the City of Elk River. First Bank and TCM have requested the <br />EDA subordinate its position on the loan. While it does create a third security position on the loan, it is <br />common in situations in which the EDA is providing gap financing for the EDA to accept a subordinated <br />position. In this instance, the EDA's position is secured through all personal property and equipment now <br />owned or acquired and located at the facility. <br /> <br />Financial Impact <br />N/A <br /> <br />Mission/Policy/Goal <br />Attract new business development to Elk River to build the city's economic vibrancy, job offerings and tax <br />base. <br /> <br />Attachments <br />1. Subordination - Twin Cities Metro <br />2. Subordination - First Bank Elk River <br />3. Res 24-05 Resolution Approving Subordination Agreements <br /> <br /> <br />Page 18 of 33