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considered business subsidies and are exempt from the provisions of the state law. The question of whether a minimum loan amount should be set was raised, but the topic was not discussed. The EDA would prefer to offer short-term loans (5-year term or less) with an interest rate of between one and two percent. The loan term period and interest rate could be negotiated depending on the public benefits associated with the project, such as job creation and tax base increase. However, there would not be an option to forgive a loan. Eligibility Eligible projects would include land and building acquisition and construction, remodeling, relocation, and commercial façade improvements. Revolving loan funds could not be used for equipment acquisition, working capital, or professional fees. Commercial multi-family residential projects would also not be eligible for RLF financing. Loans would only be available to businesses located within the City’s commercial districts. Financial Criteria The main purpose of offering revolving loan funds would be to provide gap financing to businesses unable to obtain adequate affordable capital from the private market. Since RLF loans would be subordinate to loans issued by private banks, establishing and maintaining a good working relationship with local financial institutions will be key in ensuring the successful management of the RLF. Applicants would be required to meet the underwriting criteria of the private financial institutions participating in the project. The existing financial criteria for the use of funds would remain largely unchanged. These criteria include requirements on the public to private financing ratio and the percent of private equity contributed to the project. As the RLF guidelines are currently written, a project would be required to leverage at least two dollars for every EDA dollar invested, and should include a borrower’s equity contribution of 10% of the total project cost. Goals and Principles The EDA would like to target loans towards small, established businesses in Arden Hills. Two ideas that were discussed were how the funds could be used to assist home occupation businesses looking to expand operations into a commercial building, and how they could support façade improvement projects, especially along commercial corridors like County Road E. At the same time, the EDA would also like to market public financing to help bring new, value-added businesses into the community. Overall, the EDA seemed supportive of a cautious approach to lending revolving loan funds. They discussed the need to be selective in choosing projects for financing, and wanted to target projects that would bring the most benefit to the community. At the same time, the EDA was interested in making loans in the short term so that funds can start providing benefits to the community. Arden Hills Business Subsidy Criteria and City Public Financing Guidelines On April 29, 2013, The City Council voted to approve amendments to the Business Subsidy Criteria and City Public Financing Guidelines, and to approve the Public Financing Proposal