HomeMy WebLinkAboutIV.B - Resolution - ED RLF - Spiral BreweryTO BE ADDED TO THE AGENDA
HEDRA Memorandum
To: HEDRA Commissioners
From: John Hinzman, Community Development Director
Date: December 13, 2018
Item: Resolution: Economic Development Revolving Loan Fund– Spiral Brewery – 111
2nd Street East
Request
Adopt the attached resolution authorizing staff to proceed with an Economic
Development Revolving Loan for Spiral Brewery in the amount of $12,300. The original
application request of $17,515 has been amended in order to comply with HEDRA’s
policy of granting loans of no greater than 50% of project cost.
Background
Spiral Brewery seeks funding to assist with purchase and installation of a cooler and
restoration of a new storage space adjacent to their 111 East 2nd Street location. Total
project cost is estimated at $24,600.
HEDRA provided a $48,800 loan to Spiral in November, 2017 to assist with interior
construction and working capital.
Loan Terms
HEDRA may provide a 10 year loan, for machinery and equipment, at zero percent the
first year, and 0.25% above the Prime Rate (currently 5.25%) for years 2-10. The loan
would be recalibrated to reflect changes in the Prime Rate every two years. Loan
proceeds would be disbursed upon proof of qualified expenses. The loan would be
secured with a mortgage and/or personal guaranty.
Analysis
Eligibility – Building renovations and purchase of machinery and equipment are
eligible expenses.
Business Subsidy – The loan does not exceed the $150,000 limit for constituting
a business subsidy under state law.
Purpose – The loan would assist in providing a “beneficial impact to Downtown
Hastings”, an established priority in granting loans.
Funding Availability – Approximately $39,000 remains for both commercial and
residential loans. Upon funding the $12,300 request, $26,700 would remain for
additional loans in 2018.
Demonstration of Need – Funding will allow for the expansion of the business in
allowing more space for craft beer storage for distribution accounts. Loan
funding will ease cash flow constraints in expanding the business.
Recommendation
Approval of the loan as presented is recommended.
ACTION – Adopt Resolution 2018-07 – Approving a $12,300 Economic
Development Revolving Loan Fund for Spiral Brewery
Please see the attached resolution for further information.
HASTINGS ECONOMIC DEVELOPMENT
AND REDEVELOPMENT AUTHORITY
RESOLUTION NO. 2018-07
APPROVAL OF AN ECONOMIC DEVELOPMENT REVOLVING LOAN FOR
SPIRAL BREWERY LOCATED AT 111 EAST 2ND STREET
Commissioner ______________ introduced the following resolution and moved its
adoption:
WHEREAS, the Hastings Economic Development and Redevelopment Authority
(HEDRA) has established an Economic Development Revolving Loan Fund and
Guidelines pursuant to Minnesota State Statutes 469.01 on April 13, 2017; and
WHEREAS, Spiral Brewery, has applied for a $12,300 loan to partially finance
purchase and installation of a cooler and rehabilitation of storage space at property located
at 111 East 2nd Street, legally described as follows:
That part of Lot 6, Block 4, TOWN OF HASTINGS, Dakota County, Minnesota
lying east of the following parcel: commencing at the southeast corner of said Lot
6; thence west on the south line of said Lot 6 21.62 feet to the point of beginning;
thence continuing west on said south line 22.09 feet; thence north 140.00 feet to the
north line of said Lot 6; thence east on the north line 22.16 feet; thence south 140
feet to the point of beginning.
AND
The west 11 feet of Lot 7, Block 4, TOWN OF HASTINGS, Dakota County,
Minnesota.
WHEREAS, the total investment in the project is estimated to be $24,600 for items
qualified under the Program Guidelines; and
WHEREAS, HEDRA finds that the loan is not a business subsidy under Minnesota
State Statutes 116J.993; and
WHEREAS, HEDRA finds that the work and costs meet the Economic
Development Revolving Loan Fund Program Guidelines.
NOW THEREFORE BE IT RESOLVED that HEDRA approves a loan in the
amount of $12,300 subject to the following conditions:
1. Proof of financing and/or equity for the balance of the Total Investment amount
not financed through the Revolving Loan Fund.
BE IT FURTHER RESOLVED that upon submittal of proof of financing,
HEDRA directs staff to prepare and have executed the loan and security documents and
disburse the funds with usual conditions of the program.
Commissioner _____________ seconded the resolution and upon being put to a
vote it was adopted:
Ayes:
Nays:
Absent:
The resolution was duly adopted this 13th day of December, 2018.
________________________
Scott Sinclair, Vice-President
ATTEST:
_______________________________
John Hinzman, Secretary
CITY OF HASTINGS: ED RLF//UPDATED 06.11.2018 6
CITY OF HASTINGS ECONOMIC DEVELOPMENT
REVOLVING LOAN FUND APPLICATION
SECTION 1: CONTACT INFORMATION
Legal Name of Business:_______________________________________________________________________
Project Site Address:__________________________________________________________________________
City / State / Zip:_____________________________________________________________________________
Primary Business Contact Person(s):______________________________________________________________
Phone:______________________________________________________________________________________
Email:______________________________________________________________________________________
Check One:_____ Proprietor _____Corporation_____Partnership
FEIN #_____________________________________________________________________________________
SECTION 2: PROJECT OVERVIEW
Amount Requested: $__________________________________________________________________________
Total Project Cost: $___________________________________________________________________________
Please provide a brief summary of your company and its products and/or services.
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
Please provide a brief summary of the proposed project.
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
Please describe how these funds will impact your project.
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
___________________________________________________________________________________________
CITY OF HASTINGS: ED RLF//UPDATED 06.11.2018 7
SECTION 3: ESTIMATED PROJECT COSTS
Land: $_____________________________________________________________________________________
Site improvements: $__________________________________________________________________________
New Building: $______________________________________________________________________________
Equipment/Machinery: $_______________________________________________________________________
Remodeling/Renovation: $______________________________________________________________________
Demolition: $________________________________________________________________________________
Working Capital: $____________________________________________________________________________
Permits/Fees: $_______________________________________________________________________________
Other (attach description) $_____________________________________________________________________
Total Costs $________________________________________________________________________________
SECTION 4: SOURCES OF FINANCING
Bank Loan: $________________________________________________________________________________
Bank Name: _________________________________________________________________________________
Loan Officer Name & Contact Info:______________________________________________________________
Additional Bank Loan (if applicable): $___________________________________________________________
Bank Name: _________________________________________________________________________________
Loan Officer Name & Contact Info:______________________________________________________________
Additional Private Funds (amount & source): $_____________________________________________________
Owner/Business Equity: $______________________________________________________________________
State Funding (amount & program): $_____________________________________________________________
Federal Funding (amount & program): $___________________________________________________________
Other Sources of Funding (amount and description): $________________________________________________
Total Financing: $___________________________________________________________________________
CITY OF HASTINGS: ED RLF//UPDATED 06.11.2018 8
SECTION 5: JOB CREATION (if applicable)
Current number of Employees (working at Hastings location): _________________________________________
Total number of jobs to be created (in Hastings) over the next two years: ________________________________
Job Title Number of Positions Hourly Wage w/
Benefits
Expected Hiring Date
SECTION 6: REQUIRED ATTACHMENTS CHECKLIST
Please attach the following with completed application:
_________1. Written Business Plan, including the following:
a. Business overview and company history and ownership
b. Date Established
c. Products/Services
d. Future Plans
_________2. Two Years of Historical Financials and Financial Projections
_________3. Personal Financial Statements of Proprietor, Partners, Guarantors
_________4. Letter of Commitment from Financing Sources
SECTION 7: AGREEMENT
I/We certify that all information provided in this application (and its attachments) is true and correct to the best of
my/our knowledge. I/We authorize the City of Hastings to check credit references and verify financial and other
information. I/We agree to provide any addition information as may be requested by the City of Hastings and
HEDRA.
APPLICATION SIGNATURE:________________________________________________________
PRINTED NAME & TITLE:__________________________________________________________
DATE:_________________________________________________________________________