Revolving Loan Fund Board

Economic Development Revolving Loan Fund Board February 10, 2022 PUBLIC MEETING BOARD MEMBERS STAFF MEMBERS 2:45 p.m. Aaron Reger, First Merchants Mike Austin, RLF Attorney Via Zoom Conferencing Trent Dowling, Star Financial Jennifer Hall, Bankable Greg Winkler, Economic Development Doug Whitham, Controller’s office OTHERS PRESENT Rob Sparks, CED Garrett Doan, First Merchants Bank Jan Mansfield, Key Bank Councilor Crumes CALL MEETING TO ORDER Mr. Winkler stated an executive meeting was held prior to the public meeting to discuss financials in the Board’s portfolio. A Roll call was taken with 7 members present. Item #1: Minutes Mr. Winkler called for a motion to accept the meeting minutes for November 16, 2021. Mr. Whitham made a motion to accept November 16, 2021 minutes as presented and Mr. Dowling seconded. A roll call vote was taken. Aaron Reger, yes Trent Dowling, yes Jennifer Hall, yes Greg Winkler, yes Doug Whitham, yes Rob Sparks, yes Jan Mansfield, yes Motion passed unanimously. Item #2: New Loan Request (Uranus Indiana LLC - FMB) Mr. Winkler briefed Board members on Uranus Indiana, LLC owned by Louie Keen. Mr. Keen has purchased the former Good’s Candy. Mr. Winkler stated Mr. Keen is making significant modifications including adding a line of candies and novelty items that sell quite well at his Missouri location. Mr. Keen is seeking $150,000 from the RLF. Mr. Winkler stated the Board is being asked to approve $100,000 immediately and an additional $50,000 conditional on Mayor Broderick’s approval. Councilor Crumes asked if the Mayor’s approval means the City is cosigning on the additional $50,000. Mr. Winkler stated the total cost of the project is $2,094,000 which includes $735,000 in cash, a First Merchants loan of $800,000, a seller’s note of $409,901 and the $150,000 from the RLF. The $150,000 will be a loan. Councilor Crumes asked what the City’s liability is if the loan goes into default. Mr. Winkler stated the City proper does not have any liability. Tax payers do not bear any burden as the funds come from the Revolving Loan Fund. Mr. Austin, Board Attorney stated documentation will include a promissory note as well as commercial security agreement giving the RLF a lien against personal property, second to FMB lien. Mr. Austin stated a Personal Guarantee would also be requested pledging his personal assets. The RLF will have the same recourse as any other lender if there is nonpayment. Brief discussion followed. Councilor Crumes stated her definition of small business is different and asked how many minority businesses have been served by the program since its inception. Mr. Winkler stated he would work on getting the stats that are available. Brief discussion followed. Mr. Doan, First Merchants Bank stated Uranus Indiana, LLC anticipates employing 75-100 individuals by the end of 2022 and an additional 40-50 needed each year for the next 4 years for production needs and for other attractions totaling 250-300 new jobs for Madison County. Mr. Whitham made a motion to approve a maximum of $150,000, $100.000 immediately and an additional $50,000 available after securing the Mayor Broderick’s approval. Interest rate will be 75% of the prime rate equaling 2.44% amortized over 7 years, with a term of 2 years with a personal property lien and personal guarantee subordinate to First Merchants Bank. Mr. Dowling seconded. A roll call vote was taken. Jennifer Hall, yes Trent Dowling, yes Greg Winkler, yes Doug Whitham, yes Rob Sparks, yes Jan Mansfield, yes Motion passed unanimously with First Merchants abstaining. Item #3: Approval to Apply for the Defederalization of RLF Funds Mr. Winkler stated the Economic Development Administration (EDA) has provided an opportunity to defederalize our RLF funds. Mr. Winkler stated the funds have been available since 1984 with few in the country still able to use their funds, which is a testament of the thoughtful use of the funds. Defederalization will reduce oversite of the federal government and will allow for Board Members to make changes such as size of loan and bank participation as desired, though not likely. Both the Mayor and EDA will need to approve the release of federal interest. Mr. Dowling stated he sees the move as a positive step and the Board will need to use caution to continue to use the funds for the overall good as it has performed very well; removing hurdles and keeping conditions in place is important. Councilor Crumes stated, other than bankers, the members are appointed by the Mayor and she would like to see the City Council have some input and the Board be more inclusive. Brief discussion followed. Mr. Whitham stated the Mayor is not deciding defederalization, the federal government will decide and also desires for the funds to be defederalized. Brief discussion followed. Mr. Whitham made a motion to pursue defederalization and Mr. Reger seconded. A roll call vote was taken. Aaron Reger, yes Trent Dowling, yes Jennifer Hall, yes Greg Winkler, yes Doug Whitham, yes Rob Sparks, yes Jan Mansfield, yes Motion passed unanimously. Meeting was adjourned at 3:21pm. Minutes submitted by Karen Soetenga