Laserfiche WebLink
______________________________________________________________________________ <br />City of Arden Hills <br />Economic Development Authority Meeting July 24, 2017 <br /> <br />Page 1 of 2 <br />NEW BUSINESS – 3B <br /> MEMORANDUM <br /> <br />DATE: July 24, 2017 <br />TO: EDA President and Commissioners <br /> William S. Joynes, Sr., City Administrator <br /> <br />FROM: Matthew Bachler, Senior Planner <br />SUBJECT: Minnesota Investment Fund – EDA Revolving Loan Fund <br /> <br />Summary <br /> <br />Provide direction on whether the City should submit a request for a one-time exception on how <br />revolving loan fund dollars seeded from the Minnesota Investment Fund can be used by the City. <br />The one-time exception would allow the City to use 80 percent of the uncommitted funding in <br />the EDA Revolving Loan Fund as general purpose aid for any lawful expenditure. The remaining <br />20 percent of the RLF balance would be returned to the State’s general fund. The City must <br />submit a request to the Department of Employment and Economic Development by June 1, 2018. <br /> <br /> <br />Background <br /> <br />The Department of Employment and Economic Development (DEED) established the Minnesota <br />Investment Fund (MIF) to provide industrial, manufacturing, and technology-related businesses <br />with low-cost financing to help create or retain jobs. Loans are awarded to and administered by <br />local units of governments. To qualify for financing, a business must complete a joint application <br />with a local government. Generally, the program allows local governments to retain a portion of <br />the loan repayment to create a Revolving Loan Fund (RLF). <br /> <br />In 1998, Cardiac Pacemakers, Inc. received a grant through the MIF program. A $100,000 <br />portion of this loan was repaid to the City and was used to capitalize the EDA RLF. The Cardiac <br />Pacemakers loan principal and interest were paid off in 2003. The balance in the RLF is now <br />estimated to be $166,785 as of December 31, 2016. Growth in reserves in the RLF between 2004 <br />and 2016 was derived entirely from interest earnings. <br /> <br />The City used the RLF to administer a second MIF loan for Guidant in 2004. However, none of <br />the funds currently in the RLF are associated with this agreement as the City forgave its portion <br />of the Guidant loan. The City has not used the RLF to finance any business development or <br />expansion projects since 2004 and there are no outstanding loans that the City is awaiting