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515 Little Canada Road. Little Canada, MN 55117 -1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 <br />www.eLlittle-canada.mn.us <br />MEMORANDUM <br />TO: Mayor Blesener and Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: May 6, 2005 <br />RE: TCCCF & Business Revolving Loan Program <br />MAYOR <br />Bill Blesener <br />COUNCIL <br />Jim LaValle <br />Rick Montour <br />Barbara Allan <br />John Kele <br />ADMINISTRATOR <br />Joel R. Manson <br />Attached is materials related to the Twin Cities Capital Community Fund (TCCCF) and our <br />Business Revolving Loan (BRLF) Program. Some quick background on the TCCCF is by <br />contributing (loaning) $50,000 to this program, we would be eligible to initiate project loans <br />of up to $500,000 (10 times the contribution amount). These loans could be used for <br />economic development projects relating to new building construction or rehab & renovation <br />of existing buildings. The minimum loan amount is $50,000. (1t should also be noted that <br />contributions could be $50,000, $100,000, or $200,000) <br />The debt is subordinated to the primary lender thereby making the primary loan more <br />attractive. The loan will typically be % to l% below the banks lending rate. The loans are <br />fixed rate and will be amortized between four to ten years for equipment (depending on useful <br />life) and 20 years for land and buildings. The TCCCF loan is package with other similar <br />loans and sold as an institutional investment. Once the loan is sold, there is no risk to the <br />TCCCF or the City. (Please note that substantial underwriting takes place before loan <br />issuance and applicants must be credit worthy.) <br />Should we choose to participate, but then discover we are not achieving the desired benefit, <br />we can recover our entire contribution after a three -year commitment term has expired. <br />However, no interest will be paid on the $50,000. If we were not one of the initial <br />capitalizing members (2,000,000 total), then we would also forfeit 10% of our contribution. <br />Communities that have indicated participation or are considering it are as follows: <br />* Oakdale - $200,000 * Eagan - $200,000 <br />Spring Lake Park - $50,000 * Minnetonka - $200,000 <br />* Prior Lake - $50,000 * Belle Plaine - $200,000 <br />Roseville, Maplewood, New Brighton, Shoreview, and other metro cities are also considering <br />participating. <br />1 <br />