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PUBLIC HEAR~Xi'G: APPROVAL OF GRANT APPLICATION TO THE <br />MENNESOTA DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT <br /> <br />By: Michael J. Mulrooney, Development Consultant <br /> <br />Background <br /> <br />As the Council knows, we have recruited Star Exhibits to the City of Ramsey to improve <br />the tax base and create ad. ditional jobs in the community. On of the incentives that we <br />have offered for consideration by the company involves a low interest loan through the <br />Minnesota Investment Fund. <br /> <br />The purpose of the Minnesota Investment Fund is: <br /> · to create new and retain the highest quality jobs possible on a state wide basis <br /> with a focus on industrial manufacturing and technology related industries; <br /> · to increase the local and state tax base and; <br /> · to improve the economic vitality for all Minnesota citizens. <br /> <br />The program provides grants to local units of government who make loans to assist new <br />expanding businesses. All projects must meet minimum criteria for private investment; <br />number of jobs created or retained, and wage thresholds. <br /> <br />Loans for land, buildings, equipment and training are eligible. Funds may also be used <br />for infrastructure improvements necessary, to support businesses located or intending to <br />locate in Minnesota. Only one grant per state fiscal year can be awarded to a government <br />unit. At least 50% of total project costs must be privately financed through owner equity <br />and other lending sources. Most applications selected for funding have at least 70% <br />private financing. <br /> <br />With the application, the City of Ramsey is seeking a grant in the amount of $250,000. <br />Proceeds from the grant will be used to finance equipment-for the company. Other <br />lenders involved in the project will be Associated Bank in the amount of $6,355,000 and <br />Central Minnesota Development Company in the amount of $1,300,000. Proceeds from <br />the loans provided by these lenders will be used to construct the 185,000 square foot <br />corporate headquarters and manufacturing facility. Following the completion of the <br />project, the company will employ 79 people immediately and will be creating at least 27 <br />new full time jobs within the next 2 years. The average wage rate for the new jobs will <br />be $18.84 per hour. <br /> <br />As the loan is repaid, the City of Ramsey will be able to retain the first $100,000 of <br />principle plus interest. The loan proceeds can then be used to provide additional capital <br />for the revolving loan fund. <br /> <br />-111- <br /> <br /> <br />