Agenda - Economic Development Authority - 04/13/2017

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Ms. Duchene thought there was a lot going on in different industries and retail is changing rapidly. She stated big box stores are having difficulties and closing stores and there are more global markets and more online shopping and ordering is happening. She thought there were some implications for economic development in cities and economic development brings in business, hiring and creates tax base. She also thought there are going to be changing trends drastically in the next fifteen years. Chairperson Steffen asked besides financing what are businesses looking for. Ms. Duchene stated existing businesses are struggling with cash flow. Because of some of the changes she is seeing happening, business is not reacting quick enough on how to market differently, how to find different customers, they are struggling. Some of them have gone into business with not putting together a good plan or thinking through it thoroughly enough. She stated some businesses she looks at she sends them back to the drawing board and tells them they need some financial projections. Part of it is in planning. She thought the businesses they have made loans to have a thought-out plan and they are second stage businesses and are going to grow, know what they are doing and expanding and need financing for that. She stated she has been brainstorming with people and find out what they need to do. She noted she does get a lot of calls from Ramsey and encourage them to get a little blurb out into a newsletter every time it goes out. 4.03: EDA RLF Request,American Print&Digital Economic Dev. Mgr/Assistant City Administrator Brama stated this case was reviewed by the EDA in January and February. This loan request was approved by the EDA and Council in February, contingent upon staff obtaining sufficient collateral. The purpose of this case is to update the collateral source. American Print& Digital is suggesting the City take a first lien on the attached existing equipment list, rather than a second mortgage on their personal residence. Staff has verified sufficient value exists in the attached equipment list to collateralize the EDA loan. With this in mind, staff believes this change is administrative in nature, and still meets the intent of Ramsey's policies and prudent lending standards. Staff recommends the EDA re- approve this loan with the updated collateral requirement. Member Hardin recused himself from discussion and voting due to conflict of interest. Motion by Member Burandt, seconded by Member Brunt, to recommend to City Council approve the attached draft loan agreement with American Print & Digital and approve an EDA RLF loan in an amount of up to $72,500 (not to exceed 5% of the project cost), subject to: • The borrower providing a first lien to the City on the attached "Equipment List" • The borrower receiving approval of the project loan by the Bank of Elk River and the SBA • Final review and approval of the loan agreement by the City Attorney and the CMDC. Motion carried. Voting Yes: Chairperson Steffen, Members Burandt, Brunt, Riley, Skaff, and Williams. Voting No: None. Abstain: Hardin. Absent: Skaff. Economic Development Authority/March 9, 2017 Page 4 of 12