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MEMORANDUM <br />DATE: <br />April 29, 2013 <br />TO: <br />EDA President and Commissioners <br />FROM: <br />Matthew Bachler, Community Development Intern <br />SUBJECT: <br />EDARevolving Loan Fund <br />Requested Action <br />Provide direction on the future goals of the EDA Revolving Loan Fund. <br />Summary <br />The EDARevolving Loan Fund (RLF) was establishedby the City in order to participate in the <br />Minnesota Investment Fund (MIF) programmanaged by the Department of Employment and <br />Economic Development(DEED). Grant funding received throughMIF in 1998 was used to <br />provide Cardiac Pacemakers, Inc.with a low-interest loan for an expansion project. A $100,000 <br />portion of thisloan was repaid to the Cityand was used to capitalize the RLF.The CPI loan <br />repayment and investment interest earnings are the only revenue sources currently represented in <br />the RLF’s cash balance. TheexistingRLFguidelines shouldbe updated to meet State Business <br />Subsidy Lawrequirements.Revisions to the RLF guidelines must be approved by DEED. <br />Background <br />The Department of Employment and Economic Developmentestablishedthe Minnesota <br />Investment Fund to provide industrial, manufacturing, and technology-related businesses with <br />low-cost financing to help create or retain high quality jobs. Loans are awarded to and <br />administered by local units of governments; to qualify for financing, a business must complete a <br />joint application with a local government. Generally, the program allowslocal governments to <br />retain a portion of theloan repayment to create an RLF. <br />In January 1997, the City Council authorized the City Administrator to execute an MIF loan <br />agreement with Cardiac Pacemakers, Inc. (CPI). A$100,000portion of thestate financing wasin <br />the form of a low-interest loan that was repaid to the City. This loan hada 5-year term at a3% <br />interestrate.The proposed use for the funds was a 47,000 square foot expansion project to <br />enhance research and development programs at CPI. The company estimated an additional 200 <br />high-skill jobs would be created as a direct result of the investment. <br />______________________________________________________________________________ <br />City of Arden Hills <br />Economic Development Authority Meeting April 29, 2013 <br />12 <br />Page of <br />