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

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within a traditional nonprofit launching a social enterprise adds significant complexity to an already challenging environment. The Board of Directors has raised $400,000 for this endeavor through a capital fund drive. Ideally, they intend to raise the full $1,300,000 needed to complete this project. If so, the organization will be able to cash flow SAC/WAC loan of $8,900 in annual debt service. The attached projections from the Board has included debt service for a $650,000 loan from a local lender/benefactor. Staff included debt service coverage on $650,000 with the following terms; 20 years at 5.25% with annual payments of $52,600. Projections indicate a 1:1 debt service coverage in year one. Year two indicates a 1.4:1, which allows the organization to start building cash reserves. Staff recommends approval, assuming borrower meets criteria to have some or all of the debt forgiven over a period of five years. The SAC and WAC Deferral Agreement is will only be entered into the by the City if adequate financing is obtained. The underwriting identifies the need for a substantial capital raise of over 1M dollars by Stories Foundation. As noted above, the Board has already raised 400K and is working hard to bridge the gap. If the financing is unable to be obtained the SAC and WAC Deferral is moot and the City would not have any exposure due to a building permit not being pulled. The current Restaurant Subsidy Program doesn't identify non -profits as an eligible business to apply. However, the EDA reviewed this item and recommends that due to the fact that this is a restaurant in the COR and it involves the sale of City land (both City Council priorities) that this project should be approved to utilize the program Alternatives: 1. Adoption of Resolution #21-277 Approving SAC and WAC Loan for Stories Foundation as presented. (Staff recommendation) Terms would include approval of 70%, 0% interest loan, forgivable loan for both the SAC and WAC Charges in the amount of $40,068 for Stories Foundation 2. Adoption of Resolution #21-277 Approving SAC and WAC Loan for Stories Foundation with changes; subject to City Attorney review 3. Something else Funding Source: Funding for financial assistance would come from the City's EDA Cash Balance. The EDA Cash Balance is estimated to be $1.137M. Recommendation: The EDA recommends approval of of 70%, 0% interest loan, forgivable loan for both the SAC and WAC Charges in the amount of $40,068 for Stories Foundation and Resolution #21-277 as presented. Action: Motion to adopt Adopt Resolution #21-277 Approving SAC and WAC Loan for Stories Foundation; subject to City Attorney review. Attachments Site Location Map ACTION - Resolution #21-277 SAC and WAC Summary ACTION - Draft Loan Agreement ACTION - Draft Promissory Note Redacted Biz Subsidy Application Restaurant Subsidy Policy (reference) CMDC Credit Memo