EDA Agenda 06-26-1991AGENDA
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, June 26, 1991 - 7:00 PM
City Hall
MEMBERS: Chairperson Ron Hoglund, Barb Schwientek, Bob Mosford,
Brad Fyle, Clint Herbst, Harvey Kendall, and Al Larson.
STAFF: Rick Wolfsteller, EDA Treasurer
011ie Koropchak, EDA Executive Director
Jeff O'Neill, City Assist Administrator
GUEST: Deb Gustafson, Business Development Services, Inc.
Jerry Schoen, Aroplax Corporation
Paul Weingarden, City Attorney
1. Call to Order.
2. Consideration to review GMEF Loan No. 003 for the Aroplax
Project.
a) Project plans - Jerry Schoen
b} GMEF Guidelines and term/conditions - 011ie
( Koropchak
` c) Financial analysis and total project funding - Deb
Gustafson
d} Project recommendation - Paul Weingarden
3. Consideration to approval GMEF Loan No. 003 for the Aroplax
Project and recommmondation for City Council Consideration on
July 8.
4. Adjournment.
�N
I
GREATER MONTICELLO ENTERPRISE FUND
�— FORMAL APPROVAL REVIEW
FOR
JERALD J SCHOEN AND MARY E SCHOEN, HUSBAND AND WIFE
AXOPLAX CORPORATION
2318 CHESTNUT AVENUE WEST
MINNEAPOLIS, MN 55405
(612) 374-1722
COMPLIANCE WITH THE GMEF PUBLIC PURPOSES AND POLICIES:
1. Aroplax currently has 22 employees and they plan to hire an
additional 5 employees within the next two years of which each
job will be equivalent to at least 37.5 hours per week.
2. The Axoplax project will increase the community tax base by
approximately $22,800 annually.
3. GMEF will be used to assist an existing industrial business
relocating to Monticello.
4. The GMEF will be used as a secondary source of financing to
Norwest Bank Camden.
5. A situation of gap financing exists as the package consist of
SBA, TIF, and the GMEF.
6. The GMEF is used to assist a federal program, the SBA.
7. Aroplax's financial statements will be analyzed as a credit
worthy business by Business Development Services and Norwest
Bank Camden.
I. BUSINESS ELIGIBILITY:
Industrial business.
Business located within the City of Monticello, Oakwood
Industrial Park.
Credit worthy existing business relocating to Monticello.
Loan request $30,000. $10,000 per 3 jobs equals $30,000.
II. FINANCING METHOD:
Companion Direct Loan - The GMEF is in a subordinated position
and the GMEF's lower interest rate hike an effective interest
rate for the entire project.
III. USE OF PROCEEDS:
Machinery and equipment. The EDA or City of Monticello will
be secured by a third lion position on the now equipment being
acquired.
IV. TERMS AND CONDITIONS:
Loan Size:
The GMEF currently has committed funds of
$200,000 thereby the maximum loan issuance is
$100,000 (508 of fund balance). The Aroplax
request is for $30,000.
Leveraging:
Bank $462,500 49.418 Minimum 608
OMNI/SBA $381,000 40.718 private/public
GMEF $ 30,000 3.208 Maximum 308
Equity/TIF$ 62,500 6.688 Minimum 108
GMEF ($3,000)
Loan Term:
Personal property term not to exceed life of
equipment (generally 5-7 years).
To be determined at loan approval.
Interest Rate:
Fixed rate not less than 28 below Minneapolis
prime rate. Prime rate per First Bank,
Minneapolis, 6-21-91, 8.58. To be determined
at loan approval.
Loan Fee:
Minimum fee of $200 but not to exceed 1.58 of
the total loan project. To be determined at
loan approval.
Prepayment
Policy: No penalty for prepayment.
Assumability
of Loan: None.
Business Equity
Requirements: Subject to type of loan, to be determined upon
loan approval.
Collateral: Liens on real property in project (mortage
dead).
Lions On real property in business (mortago
dead).
Lions on real property hold personally
(subject to EDA - homestead exempt).
Machinery and equipment lions (except
equipment exempt from bankruptcy).
Personal and/or corporate guarantees (requires
unlimited personal guarantoos).
To be determined upon loan approval.
Participating Lending Institution: Norwest Bank Camden, Judy
Wonderoth, (612) 667-1605.
EM
GREATER MONTICELLO ENTERPRISE
250 EAST BROADWAY
MONTICELLO, MINNESOTA
PRELIMINARY APPP�L`ICATION FOR LOAN
APPLICANT:-T�/y�• G Q -.T Jai/UEi✓
FIRM OR TRADE NAME: 7z *A r'o,v �n.e i9Ti O,✓
BUSINESS ADDRESS: e73i$ T.va 7- /1✓E tv Me (s • pfw/ SSM[O�
(p b Street) (City 6 State) (Zip Code)
TELEPHONE: BUSINESS (40 371V /7a 7- HOME :./]) 559 P/70
DATE ESTABLISHED: / 9 4%3 EMPLOYER I.D. e:
SOLE PROPRIETOR X CORPORATION PARTNERSHIP
MANAGEMENT
NAME TITLE OWN HIP 9
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STEJE
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PROJECT LOCATION: TN Du s 7";z I P., 41'.'j7 e ELL o
NEW BUSINESS �_ EXISTING BUSINESS
=e
TOTAL PROJECT COST ESTIMATE: S b'01V,ro-4)
PROPOSED USES: , REQUEST:
o,
LAND S /%D,I 0 AMOU?lT OF LOAN f30,000
EXISTING BUILDING MATURITY b TERMS
CONSTRUCTION (05-0,0-9 REQUESTED -N
MACHINERY CAPITAL -Joa APPLICANT'S
WORKING CAPITAL N PITY
OT
OTHER 2 LOAN PURPOSE yti
TOTAL USES S
PROPOSED BEGINNING DATE:
ESTIMATED COMPLETION DATE:
TITLE TO
PROJECT ASSETS TO BE HELD//BY: _ OPERATING ENTITY _ ALTER EGO
PARTICIPATING LENDER: 3i+d-4t, �Y/V/ �y✓Ow/E A�E�t/o
(flame) (Addreso)
S ( n/ pizA U);-,/DE/toTN �) L 6 7
(Contact Peeon ITeepnone
Il
(� PRESENT 1 OF EMPLOYEES: h PROJECTED 1 OF EMPLOYEES
V ADDITIONAL PROJECT INFORMATION:
APPLICANT SIGNATURE: /J()./IAGr✓ DATE SIGNED: 4•�v-V1
GREATER MONTICELLO ENTERPRISE FUND
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF MONTICELLO
Preliminary Loan Application approval 4-14-91
Loan terms negotiated and agreed upon between the developer, the
lending institution, and the EDA Executive Director
Formal loan application and financial statements analyzed by the
lending institution and/or city staff
Formal loan documents reviewed by.city staff F-7i-oi
Building permit approval or construction commitment
Loan documents reviewed by the City Attorney
Economic Development Authority approval or disapproval:
Loan Number GMEF No. 003 Loan approved
Borrower Aroplax Corporacion (Jerry Schoen)
Address Jerald J. Schoen Loan disapproved
Loan Amount $30.000
Rate Date
Terms 7 years
A motion was made by EDA member to (approve -
disapprove) GMEF in the amount of
dollars and tante to developer
this day of Seconded by EDA
member
Y EAS : NAYS:
CHEF disbursed 19_ by Check No
EDA Treasurer
City Council may reverse an EDA lonn decision within twenty-one days
of EDA approval.
ACCEPTANCE OF TERMS
I (Ya) hereby•accept the terms stated above as approved
by the Economic Development Authority in and for the City of Monticello.
Dated: