Economic Development Authority

AGENDA ECONOMIC DEVELOPMENT AUTHORITY JULY 20, 2020 1. CALL TO ORDER 2. APPROVAL OF MINUTES A. June 1, 2020 Motion by seconded by to approve, table or deny approving the minutes of the June 1, 2020 Economic Development Authority Meeting. 3. EDA RESOLUTION NO. 20 A. COVID- 19 Recovery Loan Fund ( COVID RLF) Motion by seconded by to approve, table or deny adopting Resolution No. 20 authorizing the creation of and funding for the COVID- 19 Recovery Loan Fund. 4. ADJOURNMENT Motion by seconded by to adjourn. Meeting adjourned at  EDA 2A AGENDA ITEM Maple Grove Economic Development Authority DRAFT Meeting Minutes June 1, 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 June 1, 2020 at the Maple Grove Government Center/ Public Safety Facility, Hennepin County, Minnesota. Members present were President Mark Steffenson, Vice President Karen Jaeger, Treasurer Judy Hanson, Secretary Heidi Nelson, 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; Economic Development Manager Brett Angell; and Justin Templin, City Attorney. President Steffenson called the meeting to order at 9: 06 p. m. Approval of Motion by Vice President Jaeger, seconded by Commissioner Barnett, to May 4, approve the 2020 May 4, 2020 Minutes Economic Development Authority meeting minutes. Upon call of the motion by President Steffenson, there were five ayes and no nays. Motion carried. COVID- 19 Economic Development Manager Angell provided the Commission with an update on the COVID- 19 Emergency Loan Emergency Fund. He stated applications went live at 10: 00 a.m. on May Loan Loan Fund Fund 111h. He reported the city received 35 applications, 22 in the ELF) COfirst hour. He explained all applications were reviewed and Update logged to ensure all necessary information was provided to the city. The city has 21 applications that have been approved for funding and five have been denied in the underwriting process. He reviewed the types of businesses that have been approved. He explained local businesses were very appreciative of the DRAFT Maple Grove EDA Minutes June 1, 2020 Page 2 city' s efforts to put this funding place. He indicated if federal or state dollars come forward the applications that were denied could be further reconsidered. President Steffenson stated based on phone calls he has participated in, he believed the city may be able to recoup the expense for this program through the COVID- 19 expenditure allowance. Commissioner Leith stated he heard from several businesses in the community and these business owners appreciated the ease in which they applied for the loan program. Economic Development Manager Angell thanked the IT department for their efforts to complete this task. Adjournment Motion by Vice President Jaeger, by seconded Commissioner Barnett,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 9: 15 p. m. by President Steffenson. Respectfully submitted, Heidi Nelson EDA Secretary  REQUEST FOR EDA ACTION July 20, 2020 EDA 3A DATE AGENDA ITEM ORIGINATING DEPT. AGENDA ITEM CITY ADMINISTRATOR APPROVAL Community and Economic COVID- 19 Recovery Development Loan Fund ( COVID RLF) EDA Resolution No. 20 4- PREVIOUS ACTIONS: None by the EDA RECOMMENDED COUNCIL ACTION: Motion to approve EDA Resolution No. 20 authorizing the creation of and funding for the COVID- 19 Recovery Loan Fund. COMMENTS: In May, the EDA approved the creation of a forgivable loan program, termed the COVID- 19 Emergency Loan Fund (" COVID ELF"), for businesses which faced mandated full or partial closures with funds to assist in business- related expenses as it related to re- opening of the business. To initiate this program, 250,000 was transferred from the City' s Revolving Loan Fund to the EDA. The program received significant interest from the business community and the available funds were exhausted. In total 21 businesses received loans through this program. Following the creation of the COVID ELF program and initial funding round, additional information was published by the U. S. Department of Treasury and Minnesota Department of Revenue which detailed eligible uses of funds that local governments receive through the CARES Act. COVID-related business assistance programs are an eligible use of the funds. The City/ EDA has the ability to reimburse the Revolving Loan Fund for the first round of funding through the COVID- 19 Emergency Loan Fund and allocate additional funds to a slightly altered forgivable loan program, termed the COVID- 19 Recovery Loan Fund (" COVID RLF"). The COVID- 19 Recovery Loan Fund program is designed to assist businesses within the City of Maple Grove that have been negatively impacted by COVID- 19 with businesses related expenses as a means to advance the financial recovery of the business. The COVID RLF program would be structured to provide eligible businesses with zero- interest loans of up to $ 10, 000 with a term of 5 years. The loans would have the ability to partially or fully forgiven based upon meeting set criteria as established in the loan policy. The proposed COVID RLF program policies are similar in nature to what was adopted for the COVID ELF program. The following items detail the major differences between the two programs: Eligible Expenditures: the COVID RLF program includes the purchasing of personal protective equipment( PPE) for employees and consumers as an eligible use of funds. Eligible Businesses: in order to be eligible to receive funding through the COVID RLF, the Brett Angell, Project Manager— X6003 COVID RLF Policy Request for EDA Action July 20, 2020 Page 2 business must not have received funding through the COVID ELF program. Inelijaible Activities: gambling-related activities was added to the list of in-eligible activities/ uses of funds. Deferment and Loan Forgiveness Period: the proposed deferment and loan forgiveness period for the COVID RLF program is four months, as compared to the six months that was given for the COVID ELF program. This reduction will allow for loans disbursed through both programs to be on the same repayment schedule. Upon approval of the program and allocation of funds, the application for a business to apply for funding would become active on July 271h at 10: 00 A.M. All applications would be required to be submitted via an online application form. Once an application is received, Economic Development staff will review the application for completeness and eligibility. If deemed complete and eligible, the application will be sent to CMDC for the underwriting process. All applications will be reviewed on a first- come, first- served basis. The total amount of funds requested from the CARES Act distribution for this program is $250, 000. It is anticipated that all of this funding will be utilized. Staff expect to have a similar level of interest and number of applicants for this round of funding as compared to what was seen for the COVID ELF program. ATTACHMENTS: Attachment A: EDA Resolution No. 20 Exhibit A: COVID- 19 Recovery Loan Fund Policy  Attachment A RESOLUTION NO. 20 ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MAPLE GROVE A RESOLUTION AUTHORIZING THE CREATION OF AND FUNDING FOR THE COVID- 19 RECOVERY LOAN FUND WHEREAS, the federal Coronavirus Aid, Relief, and Economic Security(" CARES") Act, passed by Congress and signed into law on March 27, 2020, was intended to provide economic relief to state and local governments negatively impacted by the COVID- 19 pandemic; WHERES, the City of Maple Grove recently received funding under the CARES Act in the total amount of approximately$ 5. 4 million; WHEREAS, the Economic Development Authority seeks to use a portion of that funding to create the COVID- 19 Recovery Loan Fund Program (" COVID- 19 RLF Program"); and WHEREAS, the objective of the COVID- 19 RLF Program is to deploy a local pool of funds to support local small businesses in the City of Maple Grove in order to help to ensure the viability of those businesses as they navigate the COVID- 19 pandemic and seek to return to pre- pandemic operations as soon as safely possible; and WHEREAS, the goals of the COVID- 19 RLF Program may be accomplished by some or all of the following means: a) providing needed financial assistance to small businesses within the community negatively affected financially as a direct result of the COVID- 19 pandemic; b) ensuring the ongoing viability of Maple Grove businesses beyond this crisis; c) limiting the number of job losses resulting from 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, and thereby limiting the total number of potential vacancies in key commercial and industrial areas of the City; and WHEREAS, the COVID- 19 RLF Program intends to offer no- interest loans in amounts up to $ 10, 000, forgivable under certain conditions, to eligible businesses with a physical location in the Maple Grove; NOW THEREFORE, IT IS RESOLVED by the Board of Commissioners of the EDA, based on the above recitals, information provided by City staff, and information received at the meeting, as follows: 1. The EDA hereby creates the COVID- 19 RLF Program and adopts the COVID- 19 RECOVERY LOAN FUND POLICY attached hereto as Exhibit A; 1  2. The EDA hereby allocates $ 250, 000 of available CARES Act funding to be used for the COVID- 19 RLF Program and to be distributed according to that program' s policies and procedures. Motion to approve the foregoing findings, conclusions, and decisions was made by and seconded by upon a vote being duly taken thereon, the following voted in favor thereof: and the following were against: and the following were absent: whereupon, the resolution was declared duly passed and adopted this 201h day of July, 2020. STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) ss. CITY OF MAPLE GROVE ) I, the undersigned, being the duly qualified Secretary of the Economic Development Authority in and for the City of Maple Grove, a public body corporate and politic and a political subdivision of the State of Minnesota, hereby certify that the above Resolution No. 20 is a true and h correct copy of the Resolution as adopted by the EDA Board on the 20` day of July, 2020. Secretary 2  Exhibit A MAPL . GRO V E luffEmffum Succeeding today, Growing tomorrow. COVID- 19 RECOVERY LOAN FUND POLICY Adopted: July 20, 2020 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 VI. Application Process EDA of Maple Grove— COVID- 19 Recovery Loan Fund Policy 2 1. INTRODUCTION The Economic Development Authority of Maple Grove COVID- 19 Recovery Loan Fund program (" COVID RLF 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 funds for business- related expenses as a means to advance the financial recovery of the business. The COVID RLF Program offers no- interest forgivable loans to eligible businesses with a physical location in the Maple Grove. The COVID RLF 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 RLF 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 RLF 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 RLF 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 impacts and seek to 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 Recovery Loan Fund Policy 3 IV. GENERAL CRITERIA A. ELIGIBLE EXPENDITURES The COVID RLF 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. Purchasing of personal protective equipment ( PPE); 7. Paying other direct business- related bills. B. ELIGIBLE BUSINESS DETAILS: To qualify for a COVID RLF 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 FTE ( full- time equivalent) 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. 7. Businesses which received funding through the Maple Grove EDA' s COVID- 19 Emergency Loan Fund (" COVID ELF") shall not be eligible to receive funds through the COVID RLF program. C. ELIGIBLE BUSINESS TYPES: Eligible businesses which may apply for the COVID RLF 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. EDA of Maple Grove— COVID- 19 Recovery Loan Fund Policy 4  D. INELIGIBLE ACTIVITIES The COVID RLF Program may not be used for the following activities: i. Agriculture ( crop or livestock production, etc.); 2. Gambling- related activities; 3. Purchasing of machinery or vehicles; 4. Moving expenses; 5. 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. REQUIRED DOCUMENTS The following documents are required at that time of application. Additional documents may be requested by the EDA, if deemed necessary to completely review and application. 1. Two most recent years of tax returns; 2. Credit check certification form; 3. Personal financial statement; 4. Payroll Report( s) 5. Three- month itemized expense report; 6. Articles of Incorporation; 7. Proof of Address; 8. SBA Form 1368; 9. Debt Schedule G. 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. EDA of Maple Grove— COVID- 19 Recovery Loan Fund Policy 5  H. 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. I. 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%. 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 four ( 4) months upon issuance of funds. Any awarded business of a COVID RLF 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 four (4) months upon award of a COVID RLF loan, 50% of the loan shall be forgiven; 2. If the business returns employment levels to that of pre- pandemic levels within four ( 4) months upon award date, the remaining 50% shall be forgiven. EDA of Maple Grove— COVID- 19 Recovery Loan Fund Policy 6  F. FEES There shall not be an application fee to apply for a COVID RLF 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. VI. APPLICATION PROCESS All applications for funding from COVID RLF will be accepted on a first- come, first- served basis. Applications will be required to be submitted online at the City of Maple Grove website. Upon submission of an application, City of Maple Grove staff will review the application to ensure complete information is provided. If additional information is needed, staff will request the needed information. Upon funds from the program being requested to the amount of or exceeding the total fund amount, applications will no longer be accepted. EDA of Maple Grove— COVID- 19 Recovery Loan Fund Policy 7