Agenda - Economic Development Authority - 09/30/1993

Home

MEMORANDUM DATE: TO: CC: FROM: SUBJECT: September 30, 1993 Economic Development Authority Ryan Schroeder, City Administrator James Gromberg, Project Manager Revolving Loan Program As the attached case indicates, there are certain decisions that the Economic Development Authority I(EDA) will need to make now that it has funds at its disposal. The EDA will need to ~de upon a program or mechanism to make these funds available to be used for economic~development within the City. City Staff has prepared the attached draft documents for a revolving loan program. These draft documents include Project Financing Guideline8 for Tax Increment Financing (TIF) projects, EDA Financing guidelines and Revolving Loan Program guidelines and application materials. The first tWO documents are fairly complete and the EDA should formally approve these documents as the guidelines for businesses to receive assistance from the City. The third document is the Revolving Loan Fund (RLF) application documents. These document~ will require the EDA to make certain decisions on how to fill in the remaining blanks on these documents. These decisions include: 1) 2) Maximum Loan Amount: It is Staffs recommendation to use 10% of the to[al project instead of a set dollar amount. Interest Rate on Loans: This may be set at some amount above the prime of the lending bank or the EDA could set the rate as equal to the return it receives on its funds. 3) Term: The Staff would recommend that the term of all loans be co- terminous with the lending institution loan. After making these decisions, the EDA would, in effect, be in business. This would allow the City Staff to provide these documents to interested businesses and businesses looking at possible location to the City. /jmt