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City of Arden Hills Economic Development Commission April 2, 2014 Page 1 of 3 MEMORANDUM DATE: April 2, 2014 EDC Agenda Item 4.A TO: Economic Development Commission FROM: Matthew Bachler, Associate Planner SUBJECT: City of Arden Hills Revolving Loan Fund Background In November 2013, the EDC reviewed changes recommended by the Economic Development Authority to the City’s Revolving Loan Fund (RLF) program. Since then, staff has met with several local bankers to discuss the RLF in more detail and to determine the feasibility of the proposed revisions. The section below provides a summary of these discussions and incorporates the input provided by the EDC at the November 2013 meeting. Staff will present general recommendations to the EDA on how the RLF program could be restructured at their meeting on April 28, 2014. Staff is requesting that the EDC review the feedback received from local banks and provide staff with any additional comments. Discussion Goals and Principles The RLF guidelines should have clearly defined goals in terms of the types of projects the City would like to target so that businesses applying for loans can easily evaluate whether their projects would be consistent with the City’s objectives. Specific principles to consider included:  Prioritize projects that will result in a direct financial benefit to the City, such as through increases in property value.  Focus on businesses that are well established. The first two years are often volatile for businesses and issuing loans to new businesses could expose the City to additional risk.  Target sectors that have better success rates with repaying loans, such as manufacturing.  Consider structuring the program to support private investment that would complement the planned public improvements in the B-2 District.