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Member Williams thought they might have some of the answers already to the questions through <br /> past market studies but did not know how to interpret the market studies. <br /> City Administrator Ulrich indicated the representatives for item 4.02 were not at the meeting yet <br /> and suggested they move item 4.03 to be discussed next. <br /> 4.03: Consider Request from Ramsey Business for Use of EDA Revolving Loan Fund <br /> City Administrator Ulrich stated the EDA is asked to consider the request from Ramsey Business <br /> for use of EDA Revolving Loan Fund, $72,500 EDA loan amount, 5% of project costs ($1.44M), <br /> 10-year term, and 3% interest. This case came to the EDA/Council for the first time in January <br /> 2017. At the time, the EDA/Council, provided the following direction to American Print & <br /> Digital: (1) an exception to the City's minimum owner equity would be allowed for American <br /> Print & Digital, from 10% to 5%, and (2) authorization to formally apply for the use of the EDA <br /> Revolving Loan Fund. <br /> City Administrator Ulrich stated the intent of the EDA RLF program is to provide gap financing <br /> in situations in which conventional/normal financing is not available for small/medium sized <br /> businesses, to make good projects "GO". He stated Mr. Mike Mulrooney is at the meeting and <br /> has done the credit analysis for the company they are considering for an EDA revolving loan. <br /> Member Hardin indicated he would be abstaining from discussion of this project. <br /> Mr. Mulrooney reviewed the applicant and project with the EDA. <br /> Chairperson Steffen asked in regards to the Revolving Loan Fund deals if, in the past, they have <br /> always had sufficient collateral or have they done unsecured loans. <br /> Mr. Mulrooney indicated this deal is a little different from what they have done in the past. In <br /> the past, they have had the Revolving Loan Fund be involved in a structure where it is ninety <br /> percent loan to value basis and there is sufficient collateral. This one is really a true gap <br /> financing. There is a lack of liquidity on the part of the borrower, which prompts the borrower to <br /> look for other sources to meet the equity requirements for the SBA 504 loan package. <br /> Chairperson Steffen indicated he did not recall a deal in the past where the City was third in line <br /> and part of a real estate package. <br /> Mr. Mulrooney stated this loan was set up initially using this structure. Other loans are typically <br /> structured that way. The policy states that there is a required minimum ten percent equity. In <br /> this particular case, to achieve all that is involved here, there are improvements to the building <br /> that when getting into appraisals do not give much value for fixing issues and that is where <br /> problems arise in a funding standpoint. <br /> Chairperson Steffen asked if home equity would be available to the lenders in the first or second <br /> position. <br /> Economic Development Authority/February 9, 2017 <br /> Page 5 of 10 <br />