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ARDEN HILLS EDA MEETING – APRIL 28, 2014 2 <br /> Support projects that advance other public policy goals adopted by the City Council, <br />including energy conservation and sustainable building practices. <br /> <br />Associate Planner Bachler stated that the City should set a maximum loan amount somewhere <br />between $50,000 and $75,000. This number should be set in part based on the type and number <br />of projects that the City sees itself financing. For example, a lower maximum amount would <br />allow the City to support more projects, but the projects being undertaken would likely be at a <br />smaller scale. <br /> <br />Associate Planner Bachler commented that if the City were to set the RLF interest rate at two <br />percent, these loans would be very competitive with commercial lending rates. Currently, <br />commercial rates average at least five percent. The EDA could consider setting the interest rate <br />as high as three percent, which would increase the amount being repaid into the RLF while still <br />being competitive with commercial rates. <br /> <br />Associate Planner Bachler reported that the private lender should set the term length, but the <br />City could still put a limit on the maximum number of years for a loan term. Terms are <br />determined by the amortization period. Projects requiring less capital investment (equipment <br />acquisition) usually have a shorter amortization and term, while projects with a larger investment <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 />