04-28-2004 Council Agenda - Laserfiche WebLink

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2-9,7,4 ceanada 515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 766 -4029 / FAX: (651) 766 -4048 www.el. little- canada. mn. us MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: April 23, 2004 RE: Implementation of Business Revolving Loan Fund Program MAYOR iVliehael L Fahey COUNCIL Jirn LaValle Matt Anderson Rick Montour Bill Blesener ADMINISTRATOR Joel R. Hanson Attached are the proposed, final documents for the Business Revolving Loan Fund (BRLF). I have made two substantive changes. The first deals with the Council's direction to provide for "total discretion" in the approval of loan applications. The impetus for this change was concern regarding an applicant obtaining a BRLF loan that focuses on outstanding maintenance issues (roof for example) versus "curb appeal ". (This change is reflected in the BRLF Plan document in item 3.E. and item 8.) The second deals with my realization that a landlord would not have been eligible for these fimds as the document was originally written. I believe we have a number of investment properties that could benefit from this program. I did not proposed any change to the loan maximums for multiple tenant properties. (This change is reflected in the BRLF Plan document in item 3.A.) I also attached Another issue I did not address is the possible need to target these loans. Specifically, are there properties we do not want improved as they are likely to be redeveloped in the not too distant future? Given the status of our redevelopment efforts, I do not know that this item should be a concern, especially with the provision we have added to deal with "discretionary approval ". However, I wanted to raise it now in the event it causes any concern for the City Council. The level of funding is another item we need to make a decision on. I am proposing that we allocate $150,000 to this endeavor. The source of these fimds will be the Development Fee that were paid by Presbyterian Homes for the Mayfield. The initial fee has accrued interest and now totals over $150,000. We initially set the deposit aside to offset our costs for the LGA/HACA penalty we were to face as part of the TIF program. However, the legislature eliminated this provision as part of property tax reform and the remaining fimds are available for us to use as we see fit. (I have a call in to Mary Ippel at Briggs & Morgan confirming this fact.) I'm including some of the development agreement language that I believe bears out my recommendation. Pending your approval, we will begin advertising the program and see what interest we can generate. US Bank is interested in participating and has improved their small business lending programs that should give us a good fit. I'm expecting their review of these guidelines by Wednesday's meeting.