Res 1997-111 0004
RESOLUTION NO. 111 - 1997
RESOLUTION APPROVING AND ADOPTING GUIDELINES FOR
THE FRIDLEY ECONOMIC DEVELOPMENT REVOLVING LOAN
FUND
WHEREAS, the City of Fridley, Minnesota (the "City") has submitted an
application to the Minnesota Department of Trade and Economic
Development (the "State") for funding under the Minnesota Investment
Fund (the "Program") ; and
WHEREAS, the City will utilize the Program funds to assist a local
business (the "Local Project") ; and
WHEREAS, the State requires that any income generated by the Local
Project be placed into an Economic Development Revolving Loan Fund
(the "Fund") ; and
WHEREAS, the State also requires that the City adopt a set of
guidelines for use of the Fund.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Fridley, Minnesota, as follows:
1. The Council hereby adopts the guidelines outlined in Exhibit A
which is attached to this resolution.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS
24T DAY OF NOVEMBER, 1997.
Y J. OE ON MAYOR
ATTEST:
to J ,�►-/� (1 .
WILLIAM A. CHAMPA - CITv CLERK
x
Page 2 -- Resolution No. 111 - 1997
EXHIBIT A
GUIDELINES FOR THE
FRIDLEY ECONOMIC DEVELOPMENT REVOLVING LOAN FUND
Introduction
The Fridley Economic Development Revolving Loan Fund (the "Fund") is
established for the purpose of utilizing program income, if any,
generated from grants issued to the City of Fridley by the Minnesota
Department of Trade Economic Development.
The goal of the Fund is to a) retain existing local businesses or
attract new businesses to Fridley, b) to create new jobs and c) to
increase the tax base.
Eligible Activities
The Fund will only be used for businesses located within the city of
Fridley. In addition, the funds can only be used for one of the
following:
1. Business expansion defined as an existing industrial or
commercial operation and costs related thereto including land
acquisition, building acquisition and construction, remodeling,
equipment purchases or public facilities improvements.
2. Development of a new business defined as a new commercial or
industrial operation and costs related thereto including land
acquisition, building acquisition and construction, remodeling,
relocation, equipment purchases and public facilities
improvements.
Terms and Conditions
1. Five (5) percent fixed-rate.
2 . Loan amounts: $10, 000 to $50, 000
3. Loan terms: Coincide with primary financing, but can extend
up to 20 years.
4. Loans may be subordinated to other primary financing.
5. All loans shall have either 1) a personal guarantee from at
least one (1) owner who holds 20% or more of the company, or 2)
a corporate guarantee.
%
Page 3 -- Resolution No. 111 - 1997
6. Subject to City approval, payments on the loan may be deferred
for up to two (2) years from the date of closing.
Job Creation Requirements
1. One (1) job shall be created for each $10, 000 worth of
assistance provided.
2. To verify that new jobs are created, the recipient of the loan
shall provide the City with the following information:
A. The total number of new jobs created
B. The job title per job
C. The date the employee (s) were hired
Other Requirements
1. The applicant' s equity participation must equal at least five
(5)percent of the total fixed-asset cost of the project
2. The applicant must show satisfactory evidence of primary
financing for the project.
3. The applicant must provide current financial statements in a
form acceptable to the City or in the case of a start-up
business a copy of their business plan.
4. The applicant must provide a detailed project pro forma showing
the project costs and a sources and uses statement.
5. The applicant must be able to demonstrate that they have the
financial capacity to repay the loan. A two year cash-flow
projection must also be provided.