Agenda - Council - 09/28/2021 - Laserfiche WebLink

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CC Regular Session Meeting Date: 09/28/2021 Submitted For: Sean Sullivan, Community Development By: Sean Sullivan, Community Development Information Title: Adopt Resolution #21-277 Approving SAC and WAC Loan for Stories Foundation 5. 17. Purpose/Background: Purpose / Background: The purpose of this case is to review the proposed request for SAC and WAC payment assistance Feedback from residents, businesses, visitors, and elected/appointed officials states that attracting more restaurants is a priority for Ramsey. On February 8, 2021 the City of Ramsey adopted a new SAC/WAC Assistance program. This Restaurant Subsidy Program is only for "new for -profit restaurants" but does have the ability to consider exceptions for existing businesses that are relocating or expanding. The city has received an application from Stories Foundation to utilize the Restaurant Subsidy Loan relating to SAC and WAC Fees for a mixed use project. The Restaurant Subsidy Program would need to be amended to allow for non-profit applicants or a rationale for an exception on why this project should be considered for the program. City staff has been working with the applicant for over a year. They have received preliminary site plans approvals and are working toward obtaining financing for the project. Financing has been challenging due to the non-profit status of this business but the applicant is optimistic that they will be able to get the financing and fundraising they need done. The SAC Charge (Metropolitan Council) is estimated to be $37,275 and the WAC Charge (City of Ramsey) is estimated to be $19,965. These fees total $57,240. Stories Foundation is requesting to utilize the 70% Restaurant Subsidy Program. Staff supports the application and consideration for financial assistance. Notification: N/A Observations/Alternatives: Observations: Project costs for this proposed mixed use project are approximately 2.2M. The current financing structure calls for 1.15M in owner equity, 650K in bank financing and 40K from the City is the form of a SAC and WAC Loan, Staff supports approval of a 70%, 0% interest loan, forgivable loan for the SAC an WAC Fees in the amount of $40,068; subject to satisfactory underwriting which is summarized below. The applicant would also be required to pay $17,172 (30%) for the SAC and WAC charges upfront and closing costs estimated to be $500-$750. The financing of this deal would include a loan agreement, and a subordinated mortgage against the real estate. The EDA met on July 8, 2021 to review this project. An excerpt of the minutes are provided summarizing the discussion and identifying the formal recommendation for approval. The EDA did not recommend amending the Restaurant Subsidy Policy to include non-profit restaurants. The EDA referenced the need for more restaurants in the COR and the fact that it involved a city owned land sale as rationale to allow a Non -Profit to apply for the SAC and WAC Deferral in this instance. CMDC Summary of Credit Memo and Recommendations: Building a startup cafe and coffee house from scratch is difficult for the most seasoned entrepreneurs. Working