Agenda - Council - 12/12/2023 - Laserfiche WebLink

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Time Frame/Observations/Alternatives: As previously mentioned,request for business assistance was requested late in the development process by Soderholm and Associates but the EDA was supportive of the timing and helping an existing business . Soderholm pulled its building permit after the EDA recommendation for a 150K loan from the RLF in August and now commenced construction on the 46,000 expansion. Please note that the requested loan amount is now $149,999,which does not require a public hearing and is not considered a business subsidy from the State of Minnesota. CMDC has underwritten the $149,999 Loan request and has drafted loan documents and recommends approval. A Loan Agreement and Promissary note are attached for review. Please note that dates will be modified based on the time that the project is completed and the loan is closed and funded(anticipated sometime in April or May of 2024). A summary of some of the key points of the project is below: Project Costs - $7.45M Owner Equity- $1.4M Bank Loan- 5.76M Public Financing- $149,999 from City RLF Project-46,000 SF expansion,real estate acquisition, machine and equipment purchase, and connection to City sewer and water New Taxable Value - $3.47M New Annual Taxes- $9700 New City Portion- $18,458 Job Creation- 3 3 new j obs averaging$40.41/hr(15 j obs included in Loan Agreement) Alternatives include: 1) $149,999 loan from RLF (3.5%, 6 years) to SA Group Inc. 2) Not provide any financial assistance at all 3) Something else It should be noted that the available RLF fund balance is $353,000. It should be also noted that the seed money for the RLF was provided from past MIF Loans through the State of Minnesota for other projects (Panther Precision, Zero Zone refrigeration, etc.) Staff is supportive of the request by Soderholm and Associates for the $149,999 loan from the City RLF. Funding Source: $149,999 from the City RLF Fund Recommendation: The EDA met on August 10, 2023 and unanimously adopted a motion to recommend to the City Council financial assistance in the form of a$150,000 loan from the City RLF for a term of six years with an interest rate of 3.5 percent. (minutes of meeting are attached) Based on the revised request suggested by TAFT Law and supported by SA Group, Inc. for a$149,999 loan amount, Staff recommends approval of the following: Adoption of Resolution #23-301 approving a $149,999 loan from RLF (3.5%, 6 years) to SA Group Inc. Outcome/Action: Motion to Adopt Resolution #23-301 Approving a $149,999 loan from RLF (3.5%, 6 years) to SA Group Inc. from City RLF; subject to City Attorney Review.