Minutes - Economic Development Authority - 03/08/2006

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Motion carried. Voting Yes: Acting Chairperson Strommen, Members Kiefer, Schindel, and Elvig. None. Absent: Chairperson Riley, Members LeTourneau and Steffen. EDA BUSINESS Case#1: Consider Revolving Loan Fund for Catheter Technologies Economic Development Coordinator Sullivan explained that Catheter Technologies has approached the City for assistance with its start-up company. Currently the balance in the City revolving loan fund is $127,074. The amount requested by this business is $34,000, which is approximately 27% of the fund. Bruce Youngberg, the owner of Catheter Technologies is present to provide a brief explanation of the company and answer questions. Bruce Youngberg, Catheter Technologies,provided an overview of Catheter Technologies. He indicated Catheter Technologies will provide component built catheter tubing to the medical device OEM market. Mr. Youngberg provided information regarding his educational and employment experience in the medical device industry. He indicated the business will rent 1,800 square feet of office and manufacturing space in a Sharp and Associates building located on Bunker Lake Boulevard. This office space will be sufficient for at least the first year until expansion is necessary. Economic Development Coordinator Sullivan advised the revolving loan fund does not currently include any stipulations that the business remain in Ramsey. He would suggest if a motion is made in support of the loan that it be contingent on the business remaining in Ramsey at Ieast until the loan is paid off. Member Schindel inquired about the loan terms. Economic Development Consultant Mulrooney replied typically the length of the loan would be similar to the expected life of the asset being financed, likely seven years on equipment; the rate and payment terms would be negotiable. Member Elvig questioned if this loan would consist of asset lending tied to specific pieces of equipment. Economic Development Consultant Mulrooney replied the Board should discuss this, as well as how the loan will be secured. Member Kiefer stated he is pleased to see a company like this coming to the community. He inquired about the rent costs included in the business plan, as they seem quite low at $1 per square foot per month. Mr. Youngberg replied the rent costs included in the business plan are the prices that were quoted to him. Member Kiefer noted one of the biggest causes of business failure is the business being under- capitalized. Mr. Youngberg replied the bank has offered a$50,000 loan with a$52,000 line of credit. He had intended to use his lake cabin for the collateral he needed, but is unable to do that since it does not have a well on the property. He has mortgaged his house since he was unable to use the cabin. Based on that, he would like to request a$50,000 loan if possible, rather than the $34,000 that was originally requested. Mr. Youngberg explained he will be required to acquire Economic Development Authority/March 8, 2006 Page 2 of 9