Laserfiche WebLink
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 />7.1 <br /> <br />Meeting Date <br />October 21, 2024 <br />Prepared By <br />Joshua Mollan, Economic Development Specialist <br /> <br />Item Description <br />Loan Extension Request - Hemmer Companies <br />Reviewed by <br />Cal Portner <br /> <br />Action Requested <br />Approve, by motion, a resolution approving the loan extension for Hemmer Companies (Distinctive Iron) and <br />authorization to execute the amended loan documents. <br /> <br />Background/Discussion <br />The EDA approved a loan to Distinctive Iron in 2015 and an additional $100,000 loan to the company in 2019. <br />The existing balance of $89,338.20 of the first loan combined with the additional loan was structured as a new <br />loan in the amount of $189,338.20. Amortized over 20 years, the present balance is $152,723.43 with a <br />maturity date of October 1, 2024, as a balloon payment. <br /> <br />Distinctive Iron submitted a request to extend the maturity date of the loan to October 1, 2026 under <br />existing terms, which is congruent with the extension policy for this loan program. Financial statements and a <br />letter from their primary lender, Bank of Elk River, were provided, and it was determined that refinancing of <br />the loan would result in an increase in monthly payments due to an increased interest rate as well as <br />origination fees. <br /> <br />At last month's meeting, the EDA authorized a continuance of the payment schedule with Distinctive Iron <br />while documents were drafted and the extension formally considered. Distinctive Iron has met all <br />requirements of the existing loan terms and there have been no issues with payment history. Staff is <br />supportive of this extension request. <br /> <br />Financial Impact <br />The EDA will continue to receive the regular monthly payments through October 1, 2026, when the balloon <br />payment will become due. <br /> <br />Mission/Policy/Goal <br />Support Elk River businesses. <br /> <br />Attachments <br />1. EDA Resolution 24-06 <br />2. Amendment Agreement <br /> <br />Page 15 of 124