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Item No. 5C Meeting Date: June 12th, 2000 Type of Business: EDA WK: Work Session; PH: Public Hearing; CA: Consent Agenda; EDA: EDA Business City of Mounds View Staff Report To: Economic Development Authority From: Aaron Parrish, Economic Development Coordinator Item Title/Subject: Authorize Economic Development Commission to examine Business Improvement Partnership Loan request Date of Report: August 7, 2018 Background: Approximately two weeks ago, Nicole Vohl contacted the city regarding the use of the Business Improvement Partnership Loan Program. Currently, Ms. Vohl and her mother are planning to lease space at 2888 County Road I for a coffee house. The space was previously used as a video rental store. The following highlights pertinent information related to the program: • Two percent interest loans are provided for interior and exterior improvements • In participation with a local bank, improvement a minimum loan of $10,000 and a maximum loan of $50,000 are provided. • The city participates in the program by providing ½ the loan amount at a 2% interest rate. In essence, the maximum level of city participation is $25,000 on a $50,000 loan. The remaining half is financed at conventional rates. • To be eligible, the applicant must have been a Mounds View business for at least two years. Admittedly, the program has not been used in recent years. In addition, one of the eligibility requirements is that the applicant has been a Mounds View business for at least two years. As a new business, the prospective applicant does not meet this criterion. Accordingly, preliminary consideration would require deviation from the existing requirements. Based on a discussion with Cindy Carlson of Western Bank, it looks as if they plan on spending $100,000+ for interior improvements and renovation etc... At this point, they have approximately $55,000 from a home equity loan, and are looking for a combination of bank financing/city financing for the remaining portion. While qualification for a home equity loan would indicate creditworthiness, a more detailed credit evaluation will be conducted in conjunction with the proposed bank financing. At this point, Ms. Vohl has not formally submitted an application for the program. Rather, conceptual approval is being requested. If the EDA is comfortable with the proposal in concept, direction authorizing the EDC to evaluate the prospective application on a more detailed basis would be appropriate. Based on the Community Development Department’s Work Plan, it is anticipated that the Business Improvement Partnership Loan Program will be evaluated in the future to better meet current community needs. Necessary Actions: Depending on the will of the EDA, authorize the EDC to examine the prospective loan application ______________________________________ Aaron Parrish, Economic Development Coordinator (763) 717-4029