Agenda - Economic Development Authority - 01/12/2017

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Economic Development Authority (EDA) 4. 2. Meeting Date: 01/12/2017 Submitted For: Patrick Brama,Administrative Services By: Patrick Brama,Administrative Services Title: Consider Request from Ramsey Business for Use of EDA Revolving Loan Fund Purpose/Background: PURPOSE Consider Request from Ramsey Business for use of EDA Revolving Loan Fund (RLF). This request is to allow for an exception and/or amendment to the EDA RLF Guidelines, related to minimum equity. More specifically,to reduce the minimum amount of business equity required, only in situations in which the Small Business Administration(SBA) 504 Loan Program is being used by a business. The SBA 504 Program requires a minimum 10%equity--and the current EDA RLF guidelines requires a minimum 10%equity--which essentially doesn't allow the programs to stack*. *Some specific exceptions do exist. BACKGROUND The intent of the EDA RLF program is to provide gap financing in situations in which conventional/normal financing is not available for small/medium sized businesses,to make good projects "GO." Please see attached EDA RLF guidelines for details. The SBA 504 Loan program is a very common financing solution for small/ medium sized businesses. Because of the 10%equity requirement in the EDA RLF guidelines,these two programs cannot stack. NOTE: the SBA 504 Loan Program considers the EDA RLF as equity. Also, it should be noted, staff has received this general concern/request in the past from other Ramsey businesses--this is not an uncommon concern. APPLICANT/BUSINESS The business considering the EDA RLF is American Print&Digital. They are located of Radium Street in eastern Ramsey,just south of Bunker Lake Boulevard. They currently lease about 5,000 sf in a multi-tenant spec building. They are a"broker" style printing firm. Meaning,they don't work with end-user customers directly--they only work with brokers. Brokers sign contracts with American Print&Digital for work. They have 7 full-time employees. The business started in 2009 and has steadily grown year-after-year. American Print&Digital needs room to grow, at least 10,000 sf total. They recently placed an order for a very expensive piece of equipment,which they already have enough orders to run for a minimum 6-hours per week, and expect at least 20-hours per week immediately when it's installed. The new piece of equipment allows them to expand their production capacity to larger runs, on physically larger pieces of material, and to produce product quicker/cheaper. Please see attached cover letter from American Print&Digital for details. THE PROJECT American Print&Digital has a purchase agreement in place for the former"All-Brite Printing" building located