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term, American Print& Digital plans to sub-lease a small portion of the property until they need <br /> it. <br /> Economic Dev. Mgr/Assistant City Administrator Brama stated the project is about $1.4 million <br /> in which American Print & Digital is seeking financing, and about $600,000 of the total project <br /> costs are the new machine. The Bank of Elk River has tentatively indicated they would fund 50%, <br /> the SBA had tentatively indicated they would fund 40%, and the owner has indicated they would <br /> like the EDA RLF to cover 5%, and for owner equity to be 5%. <br /> Economic Dev. Mgr/Assistant City Administrator Brama indicated the owner is requesting 5% <br /> EDA RLF financing to allow equity dollars to be dedicated to ongoing business working capital <br /> needs. The printing industry requires a significant level of working capital to upgrade machines, <br /> repair machines, and purchase ever-changing software. It is not uncommon for these unexpected <br /> costs related to machines to cost several hundred thousand dollars. American Print& Digital can <br /> physically make the deal happen without the EDA RLF. However,they want to be prudent/smart <br /> about how they are growing their business planning and they want to make sure they can digest <br /> their growth. <br /> Economic Dev. Mgr/Assistant City Administrator Brama presented the staff report. <br /> Mr. Mulrooney stated he did not see in the policy an allowance for the exception. He thought it <br /> may be time to review the policy because he thought there were some inconsistencies within the <br /> policy in regards to referring to the EDA and the City. He thought there should be some <br /> clarification as to which entity is being talked about in terms of review of a loan. He reviewed his <br /> memo with the Board. <br /> Chairperson Steffen stated they will not loan for working capital. <br /> Mr. Mulrooney indicated that was correct. <br /> Chairperson Steffen stated the applicant has the cash to do the ten percent down but they want to <br /> keep some cash for working capital. <br /> Mr. Mulrooney stated that is what they have been told but he has not seen any paperwork to <br /> indicate that. The borrower has expressed a desire to retain cash for operating purposes. <br /> Economic Dev. Mgr/Assistant City Administrator Brama reviewed with the EDA what the <br /> revolving fund could be used for. <br /> Member Riley stated he would not like to see the loan extended to 20 years. He would like to see <br /> this kept as a revolving loan fund. The case talks about the interest rate and they have not talked <br /> about that. He noted he was still ok with the three percent rate. He thought as far as bringing it <br /> down to the equity, the City is third in line already so he did not know if that mattered much. He <br /> stated the reason why they have this is to help out businesses who cannot get additional financing. <br /> Chairperson Steffen agreed and stated that is what the money is there for. <br /> Economic Development Authority/January 12, 2017 <br /> Page 6 of 9 <br />