Economic Development Authority

AGENDA ECONOMIC DEVELOPMENT AUTHORITY APRIL 20, 2020 1. CALL TO ORDER 2. APPROVAL OF MINUTES A. April 6, 2020 Motion by seconded by to approve, table or deny approving the minutes of the April 6, 2020 Economic Development Authority Meeting. 3. EDA EMERGENCY LOAN FUND POLICY A. COVID- 19 Emergency Loan Fund ( COVID ELF) seconded by to Motion by approve, table or deny approving the COVID- 19 Emergency Loan Fund Policy establishing a forgivable loan program to assist businesses. 4. ADJOURNMENT seconded by to Motion by adjourn. Meeting adjourned at  EDA 2A AGENDA ITEM Maple Grove Economic Development Authority DRAFT Meeting Minutes April 6, 2020 DRAFT Delete this when final edits are complete) Call to Order Pursuant to call and notice thereof, an Economic Development Authority Meeting of the Maple Grove City Council was held at 7: 30 p.m. on April 6, 2020 at the Maple Grove Government Center/ Public Safety Facility, Hennepin County, Minnesota. Members present were President Mark Steffenson, Vice President Karen Jaeger, Secretary Heidi Nelson, Treasurer Judy Hanson, and Commissioners Phil Leith and Kristy Barnett. Absent was none. Present also were Joe Hogeboom, Community and Economic Development Director; Peter Vickerman, Planning Manager; Ken Ashfeld, Director of Public Works/City Engineer; Brett Angell, Economic Development Manager; and Justin Templin, City Attorney. President Steffenson called the meeting to order at 8: 44 p.m. Approval of Motion by Vice President Jaeger, seconded by Commissioner Barnett, to approve the December 16, 2019 December 16, Economic Development Authority meeting minutes. Upon 2019 Minutes call of the motion by President Steffenson, there were five ayes and no nays. Motion carried. ProMed Economic Development Manager Angell requested the EDA adopt Resolution No. 18, approving the ProMed Redevelopment Redevelop- Project Area and TIF Plan. He explained this was the same ment Project action that was taken by the City Council. Area and TIF Plan Approval Motion by President Steffenson, seconded by Treasurer Hanson, to approve adopting EDA Resolution No. 18 approving the modifications of the Redevelopment Plan for Redevelopment Project Area No. 1, Approving the creation of the ProMed Tax Increment Financing District and DRAFT Maple Grove EDA Minutes April 6, 2020 Page 2 approving the adoption of a Tax Increment Financing Plan therefor.Upon call of the motion by President Steffenson, there were five ayes and no nays. Motion carried. Adjournment Motion by Vice President Jaeger, seconded by Treasurer Hanson, to adjourn to the City Council meeting. Upon call of the motion by President Steffenson, there were five ayes and no nays. Motion carried. The meeting was adjourned at 8: 16 p.m. by President Steffenson. Respectfully submitted, Heidi Nelson EDA Secretary  REQUEST FOR EDA ACTION April 20, 2020 EDA 3A DATE AGENDA ITEM ORIGINATING DEPT. AGENDA ITEM CITY ADMINISTRATOR APPROVAL Community and Economic COVID- 19 Emergency Development Loan Fund ( COVID ELF) le4- PREVIOUS ACTIONS: None by the EDA RECOMMENDED COUNCIL ACTION: Motion to approve the COVID- 19 Emergency Loan Fund Policy establishing a forgivable loan program to assist businesses. COMMENTS: The COVID- 19 pandemic continues to have drastic impacts on the business community, particularly those which have faced mandated closures. In response to these impacts, the Federal and State governments have created programs addressing providing instant capital to businesses to survive the closure period. Throughout the Twin Cities metro, many local governments are also considering grant and loan programs to assist businesses within their direct municipal boundaries. Upon review of available programs for gaps, comparison with other jurisdictions, and collaboration with local organizations, Community and Economic Development staff have development guidelines and criteria for the creation of a new forgivable loan program, termed COVID- 19 Emergency Loan Fund COVID ELF). The purpose of this program is to provide necessary funding to businesses which have been mandated to close to assist as they are allowed to re- open. Eligible expenses under the proposed program would include: payroll, accounts payable, fixed debts, inventory costs, utility costs, and other bills incurred by the businesses. The COVID ELF program would be structured with the following criteria: Maximum Amount: up to $ 10, 000; Term: Maximum term of five( 5) years; Rate: 0% interest; Deferment: 6-months of no payments; Forgiveness: up to 100% forgiven if business meets set criteria Applicants for the loan fund must be a Maple Grove business with a physical non-residential address and meet the zoning requirements for the district or be a legally non- conforming use. Applicant businesses would be allowed to have no more than 40 employees at the specific business location. Any applicant must not have delinquent utilities, taxes or bills due to the City prior to February 2020. Brett Angell, Project Manager— X6003 COVID ELF Policy Request for EDA Action April 20, 2020 Page 2 Any application for funding through the COVID ELF would require a brief underwriting process, similar to what the Minnesota Department of Employment and Economic Development ( DEED) is using for their Emergency Loan. CMDC, who also does the underwriting for the City' s Revolving Loan Fund, is willing and able to provide the underwriting for the COVID ELF program. Funding of the program would come from a redistribution of funds from the Revolving Loan Fund, which would be transferred to the EDA for COVID ELF program. In 2018, the City supplemented the Minnesota Investment Fund( MIF) repayments in the Revolving Loan Fund with proceeds from a land sale. The land sale proceeds are able to be redirected out of the RLF for the purpose of assisting businesses. Upon approval of the creation of the COVID ELF program, a resolution will be brought to the City Council at the May 4ch City Council meeting which would allow for the transfer of funds. Staff is recommending the transfer of$ 250, 000 to initiate the program. ATTACHMENTS: Attachment A: COVID- 19 Emergency Loan Fund Policy  Attachment A MAPLE GROVE r: Nr Succeeding today. Growing tomorrow. COVID- 19 EMERGENCY LOAN FUND POLICY Adopted: Economic Development Authority of Maple Grove Economic Development Department 12800 Arbor Lakes Parkway Maple Grove, MN 55369 763- 494- 6003  Table of Contents I. Introduction II. Purpose And Authority III. Objectives IV. General Criteria V. Financing Criteria EDA of Maple Grove— COVID- 19 Emergency 2 Loan Fund Policy I. INTRODUCTION The Economic Development Authority of Maple Grove COVID- 19 Emergency Loan Fund program (" COVID ELF Program") was created as a means to assist businesses within the City of Maple Grove which have been negatively impacted by the COVID- 19 pandemic with costs associated with re- opening of the business. The COVID ELF Program offers no- interest forgivable loans to eligible businesses with a physical location in the Maple Grove. The COVID ELF Program is administered by Community and Economic Development staff and the Economic Development Authority of Maple Grove. II. PURPOSE AND AUTHORITY A. The purpose of this policy is to establish the EDA' s position relating to the use of the COVID ELF Program. This policy shall be used as a guide in the processing and review of applications requesting loan funds. B. The criteria are to be used in conjunction with other relevant policies of the City and/ or EDA. C. The EDA reserves the right to approve or reject projects on a case- by- case basis, taking into consideration factors considered appropriate by the City, in addition to established policies, criteria, and potential benefits. Meeting the criteria does not guarantee a COVID ELF Program loan shall be approved. Approval or denial of an application is at the sole discretion of the EDA. III. OBJECTIVES The objective of the COVID ELF Program is to deploy a local pool of funds to support local small businesses in order to ensure the viability of the businesses as they move past the COVID- 19 pandemic and seek to re- open or return to pre- pandemic operations. This may be accomplished by some or all of the following means: A. Provide needed finances to small businesses within the community which have been negatively affected financially as a direct result of the COVID- 19 pandemic; B. Ensure the viability of Maple Grove businesses moving past this crisis; C. Limiting the number of job losses as a direct result of the pandemic by assisting businesses return to their pre- pandemic employment levels; D. Limiting the number of businesses which would potentially permanently close due to COVID- 19 pandemic impacts. Thereby also limiting the total number of potential vacancies in key commercial and industrial areas of the City. EDA of Maple Grove— COVID- 19 Emergency Loan Fund Policy 3 IV. GENERAL CRITERIA A. ELIGIBLE EXPENDITURES The COVID ELF Program may be used for working capital purposes defined as: 1. Paying fixed debts; 2. Payroll costs; 3. Accounts payable; 4. Utility payments; 5. Inventory costs; 6. Paying other direct business- related bills. B. ELIGIBLE BUSINESS DETAILS: To qualify for a COVID ELF Program loan, eligible businesses must meet the following criteria: 1. Be considered an eligible business type, as defined in IV.0 of this policy; 2. Have no more than 40 employees at the location address. Special consideration may be given to businesses which utilize independent contractors and sole proprietors within their business; 3. The business must have a physical non- residential address within the City of Maple Grove. Proof of address shall be required when applying; 4. All business applicants must be an allowed use through zoning of the property or be a legally non- conforming use; 5. Be a legal entity registered with the Minnesota Secretary of State, and be in good standing 6. Any applicant must not have delinquent taxes, bills or charges due to the City from February 2020 or prior. C. ELIGIBLE BUSINESS TYPES: Eligible businesses which may apply for the COVID ELF Program include businesses which have been deemed non- essential by the State of Minnesota or those which have faced mandated closures per State of Minnesota orders. D. INELIGIBLE ACTIVITIES The COVID ELF Program may not be used for the following activities: EDA of Maple Grove— COVID- 19 Emergency Loan Fund Policy 4  1. Agriculture ( crop or livestock production, etc.); 2. Purchasing of machinery or vehicles; 3. Moving expenses; 4. Land acquisition for speculation; E. REVIEW CRITERIA Assistance must be evaluated on the existence of the following conditions: 1. Demonstrated financial need; 2. Number of jobs retained at the location; 3. Financial ability to continue business operations; 4. Timeliness of funds being needed. F. EDA RIGHTS The EDA reserves and retains the right to deny any loan application for funding. All loan receipts shall be required to indemnify the City of Maple Grove, the Economic Development Authority of Maple Grove, and any officers acting on their behalf. G. CONFLICT OF INTEREST An officer of the City will not have a personal financial interest or personally benefit financially from the business to be assisted. Minn. Stat. 471. 87 and 471. 88 provide guidance on conflict of interest. H. GOVERNMENT DATA PRACTICES Information contained in the application for assistance will become a matter of public record with the exception of those items protected under Minn. Stat. 13. 591. V. FINANCING CRITERIA A. LOAN SIZE All loans shall have a maximum amount of$ 10, 000. B. INTEREST RATES All loans shall have an interest rate of 0%. EDA of Maple Grove— COVID- 19 Emergency Loan Fund Policy 5  C. TERMS All loans shall have a term of no more than five ( 5) years. D. DEFERMENTS All repayments shall be deferred for a total of six( 6) months upon issuance of funds. Any awarded business of a COVID ELF Program loan shall have the ability to repay portions of the loan during the deferment period should the business so choose. E. FORGIVENESS Up to 100% of the loan has the ability to be forgiven by the EDA upon successful completion of the following: 1. If the business maintains operations within the City for six ( 6) months upon award of a COVID ELF loan, 50% of the loan shall be forgiven; 2. If the business returns employment levels to that of pre- pandemic levels within six ( 6) months upon award date, the remaining 50% shall be forgiven. F. FEES There shall not be an application fee to apply for a COVID ELF loan. Any fees related to underwriting, legal, loan closing, filing, recording, and other fees incurred will be paid for by the Economic Development Authority at the time of loan issuance. EDA of Maple Grove— COVID- 19 Emergency Loan Fund Policy 6