HomeMy WebLinkAboutIV.D - Revised Loan - River Cities - ADDED TO AGENDA
HEDRA MEMORANDUM
To: HEDRA Commissioners
From: Rusty Fifield, Economic Development Coordinator
Date: January 8, 2020
Item: Revised Loan Amount –216 2nd Street East
Action Requested
Adopt the attached resolution authorizing staff to proceed with a revised Economic
Development Revolving Loan for River City Properties LLC in the amount of $9,652 for electric
system improvements to 216 2nd Street East.
Background
At the November meeting, HEDRA
approved Economic Development Revolving
Loans to make electrical system
improvements related to apartments in
buildings at 214 2nd St. E. ($6,337) and 216
2nd St. E. ($7,632). During the inspection
process additional improvements were
identified. The improvements add $4,040 to
the total cost. The property owners have requested that the loan for 216 be increased related to
these amounts. Documentation for the improvements is attached.
Loan Terms
Loan terms remain the same:
Ten-year term
0% interest the first year, and 0.25% above the Prime Rate (currently 5.00%) 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 personal guaranty.
HEDRA’s position would be subordinate to the existing mortgage on 216.
Recommendation
Approval of the loans as presented is recommended. ACTION – Adopt Resolution 2020-02 –
Approving a revised Economic Development Revolving Loan to River City LLC for
Improvements to 216 2nd Street East in the amount of $9,652.
Cost Loan
Base Contract 214 12,675 6,337
Base Contract 216 15,265 7,632
Additional Costs 4,040 2,020
Revised 216 Loan 9,652
HASTINGS ECONOMIC DEVELOPMENT
AND REDEVELOPMENT AUTHORITY
RESOLUTION NO. 2020-02
APPROVAL OF A REVISED ECONOMIC DEVELOPMENT REVOLVING LOAN TO
RIVER CITY PROPERTIES LLC FOR IMPROVEMENTS TO 216 2ND STREET EAST
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, HEDRA has approved a loan to River City Properties LLC in the amount of
$7,632 to partially finance electrical system improvements in the building located at 216 2nd
Street East; and
WHEREAS, additional costs estimated to be $4,040 for items qualified under the
Program Guidelines have been identified; 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 (1) HEDRA approves a revised loan in
the amount of $9,652 subject to the previously approved terms and conditions, and (2) The
Executive Director is authorized to sign and execute documents related to this loan.
Commissioner ______ seconded the resolution and upon being put to a vote it was
adopted:
Ayes: Absent:
Nays: Abstention:
The resolution was duly adopted this 9th day of January, 2020.
________________________
_______________, President
ATTEST:
______________________________
John Hinzman, Secretary