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ARDEN HILLS EDA MEETING – APRIL 28, 2014 5 <br />(real estate acquisition) have a longer amortization and term. If the goal is to see a quicker return <br />of loan repayments, the City should focus on projects with short-term amortization periods of ten <br />years or less. <br />The following types of projects should be eligible for loans issued through the RLF: <br /> <br /> Real property improvements <br />- Internal fixed improvements (walls, ceilings, floors, lighting, windows, doors) <br />- Streetscape and landscaping improvements <br />- Plumbing, electrical, and mechanical systems <br />- Air conditioning <br />- Roofing <br />- Parking lot surfacing and lighting <br />- Accessibility improvements <br />- Energy conservation and energy retrofits <br /> <br /> Commercial façade improvements <br />- Cleaning and painting of exterior surfaces <br />- Repair or replacement of windows, doors, cornices, masonry, awnings, and decorative <br />details <br />- Sign removal, repair, or replacement <br /> <br /> Fixed asset equipment <br />- Production equipment <br /> <br />Associate Planner Bachler reported that the revolving fund loans should act as gap financing <br />for loans being made by a private lender. For each bank participating in the program, a Lender <br />Agreement would be signed with the City. This agreement would outline the general <br />requirements of the RLF program and what the expectations are of the bank in partnering with <br />the City. A Participation Agreement would also be created for individual loans, providing <br />specific details and responsibilities for each deal. The lender would prepare the note and <br />collateral documents and the City would issue a check from the RLF to purchase a participation <br />in the note. The lender would be responsible for disbursing the loan funds and collecting <br />payments for both the City and private portions of the loan. Monthly payments would then be <br />submitted to the City. <br /> <br />Associate Planner Bachler indicated that the bank would also be responsible for doing the <br />necessary underwriting for the entire loan package. Since banks are risk-averse, if an applicant <br />meets a bank’s underwriting requirements the City can be confident about the risk level <br />associated with the loan. The City should primarily rely on the financial criteria used by the <br />participating bank to screen loan applications. Additional recommendations included: <br /> <br /> Require that a minimum of 50 percent of the project be privately financed. <br /> Many projects would likely not receive a high score using the City’s Grading and Report <br />Card for public financing proposals, as this tool is largely focused on redevelopment