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thi ,�., Request for Action <br /> River <br /> To Item Number <br /> Economic Development Authority 6.1 <br /> Agenda Section Meeting Date Prepared by <br /> General Business April 21,2014 Brian Beeman, Director of Economic <br /> Development <br /> Item Description Reviewed by <br /> Orluck Industries Forgivable Loan Extension Jeremy Barnhart,Deputy Director, CODD <br /> Reviewed by <br /> Action Requested <br /> By motion, approve a Forgivable Loan extension for Orluck Industries in the amount of$200,000 and <br /> recommend to the City Council on same. <br /> Background/Discussion <br /> On April 8,2013, the EDA and City Council approved a Forgivable Loan for Orluck Industries to help <br /> fund a 12,000 sq. ft. expansion that will create six new jobs and induce$1.2 million in private investment. <br /> The loan was for$200,000 at 3%interest, 5 year term, 20 year amortization,with the EDA to secure a <br /> personal guarantee and subordinate lien position on the building and machinery financed. <br /> The loan is to be forgiven upon completion of all the goals and requirements set forth by the Forgivable <br /> Loan Policy, and the jobs created as a result of the forgivable loan program are retained for a minimum of <br /> one year.The initial expansion project was to be completed in 2014. <br /> Due to the Federal Sequestration and the announcement of military cutbacks, Orluck Industries has <br /> experienced some contract reductions. This has caused Orluck to reconsider its options and has decided <br /> not to peruse the expected 2014 expansion project. Instead, Orluck is requesting that the EDA extend <br /> the approved Forgivable Loan to allow the project to begin in 2015.A new letter of commitment will be <br /> provided at the meeting. <br /> The Department of Employment and Economic Development has confirmed that an extension is <br /> permissible. Peter Orluck, the CEO will be present to answer any questions. If the EDA considers an <br /> extension beyond 2015, DEED has requested that they be notified before proceeding. <br /> Financial Impact <br /> The Forgivable Loan fund balance is $311,155.13,with$111,155.13 allocated to Sportech. The financial <br /> impact of approving the loan extension would be $200,000 with the applicant paying all legal and filing <br /> fees at closing. This would close out the account in 2015 as requested by DEED. <br /> Attachments <br /> • March 29,2013 EDA Finance Committee Minutes,April 8, 2013 EDA Packet, &May 6, 2013 <br /> City Council Minutes for Orluck Industries Forgivable Loan <br /> r ® w E a E 1 1 1 <br /> NATURE <br />