Economic Development Authority EDA

City of South St. Paul Economic Development Authority Agenda FLEMING FIELD AIRPORT 1725 HENRY AVE SOUTH ST. PAUL, MN 55075 Monday, June 6, 2022 IMMEDIATELY FOLLOWING THE CONCLUSION OF THE 7:00 P.M. MEETING OF THE CITY COUNCIL 1. CALL TO ORDER: 2. ROLL CALL: 3. AGENDA: A. Approval of Agenda Action – Motion to Approve Action – Motion to Approve as Amended 4. CONSENT AGENDA: All items listed on the Consent Agenda are items, which are considered to be routine by the Economic Development Authority and will be approved by one motion. There will be no separate discussion of these items unless a Commissioner or citizen so requests, in which event the item will be removed from the consent agenda and considered at the end of the Consent Agenda. A. EDA Special Meeting Minutes of March 21, 2022 B. Approval of Amendment #2 to Development Agreement (285 Hardman Avenue South) C. 135 Grand Avenue Demolition – Change Order #1 & #2 D. Acceptance of HRA Properties between South Concord Exchange and Camber Avenue, Resolution 2022 - 4 5. GENERAL BUSINESS: A. Approval of Updated Economic Development Revolving Loan Fund Policy 6. ITEMS FOR FUTURE FOLLOW-UP: General communications of the President and Commissioners are provided and may be considered for inclusion on a future agenda. There will be no discussion or decisions made related to these items at this meeting. 7. ADJOURNMENT: Respectfully Submitted, Ryan Garcia, EDA Executive Director This meeting is being taped by Town Square Television (NDC4). Replays can be viewed on Government Channel 19. Replay Times – Friday following Meeting at 1:00 p.m. & 7:00 p.m. 651-451-7834  4-A MINUTES OF THE ECONOMIC DEVELOPMENT AUTHORITY CITY OF SOUTH ST. PAUL DAKOTA COUNTY, MINNESOTA Special Meeting March 21, 2022 City Council Chambers – South St. Paul City Hall 1. CALL TO ORDER The Special Meeting of the South St. Paul Economic Development Authority was held on March 21, 2022 in the South St. Paul City Council Chambers. President Francis called the meeting to order at 8:00 p.m. 2. ROLL CALL Members Present: President Francis, Commissioners Bakken, Dewey, Hansen, Podgorski, Seaberg, and Kaliszewski. Staff Present: EDA Executive Director Ryan Garcia, City Administrator Joel Hanson, and Legal Counsel Pete Mikhail. 3. AGENDA Motion/Second: Commissioner Kaliszewski moved and Commissioner Bakken seconded approval of the agenda. Motion carried 7 ayes / 0 nays 4. CONSENT A. EDA Meeting Minutes of February 7, 2022 B. Approval of Mortgage Satisfaction, Resolution 2022 – 3 Motion/Second: Commissioner Dewey moved and Commissioner Kaliszewski seconded approval of the consent agenda. Motion carried 7 ayes / 0 nays 5. GENERAL BUSINESS EDA Minutes Special Meeting - March 21, 2022 Page 2 of 2 A. First Amendment to Development Agreement with Linn Diversified Investments, LLC Motion/Second: Commissioner Bakken moved and Commissioner Hansen seconded the motion to approve a First Amendment to Development Agreement with Linn Diversified Investments, LLC. Motion carried 7 ayes / 0 nays 6. FUTURE FOLLOW-UP There were none. 7. ADJOURNMENT Motion/ Second: Commissioner Dewey moved and Commissioner Podgorski seconded the motion to adjourn the meeting at 8:04 p.m. Motion carried 7 ayes / 0 nays Approved: Ryan Garcia, Secretary  EDA Agenda Item Report Date: June 6, 2022 EDA Executive Director: _________ 4-B Agenda Item: Approval of Amendment #2 to Development Agreement (285 Hardman Avenue South) Action to be considered: Approve the Second Amendment to Development Agreement with Beck Properties of Minnesota, LLC. Summary: On May 3, 2021 the EDA approved a Purchase and Development Agreement with Beck Properties of Minnesota LLC for the construction of a 28,800 square foot office/warehouse building at the EDA- owned property at 285 Hardman Avenue, and closed on the sale to Beck right around the first of the year in 2022. The Developer has continued to work with their general contractor through the design and build process, and has run into significant delays in the ability to procure key building materials. The developer has also been holding off on beginning soil surcharge through the winter and early spring. Due to significant lead times for precast concrete and steel (12 – 14 months), the developer has missed the prescribed Commencement Date (May 1, 2022) and will likely miss the prescribed Completion Date (April 30, 2023) from the Development Agreement. These issues are out of the Developer or Contractor’s control and therefore, Staff is comfortable extending these dates via Amendment #2 to the Development Agreement. As outlined in Amendment #2, the Commencement Date will be changed to September 30, 2022 and the Completion Date will be changed to December 31, 2023. Soil corrections, site grading, and installation of utilities will all qualify as “Commencement” for purposes of the Agreement. Staff is recommending approval of Amendment #2 as presented.  SECOND AMENDMENT TO DEVELOPMENT AGREEMENT THIS SECOND AMENDMENT TO DEVELOPMENT AGREEMENT (this “First Amendment”) is entered into as of June 6, 2022 (the “Effective Date”), by and between the South St. Paul Economic Development Authority, a public body corporate and politic organized under the laws of Minnesota (“EDA”), and Beck Properties of Minnesota, LLC, a Minnesota limited liability company (“Buyer”). RECITALS Recital No. 1. EDA and Buyer entered into a Development Agreement dated May 3, 2021 and recorded as Document No. 856749 on January 6, 2022 in the Dakota County Recorder’s Office (“Development Agreement”), and a First Amendment to Development Agreement dated July 12, 2021 and recorded as Document No. 856962 on January 11, 2022 for the purchase and sale of real property identified in the Development Agreement. Recital No. 2. Buyer has requested the Development Agreement be amended to extend the Commencement and Completion Dates. Recital No. 3. EDA does not object to the extension. NOW, THEREFORE, in consideration of the mutual promises and covenants of each to the other contained in this Second Amendment and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do covenant and agree as follows: 1. The Development Agreement shall be amended as follows: 10.6 Commencement and Completion of Construction. Subject to Unavoidable Delays, Developer shall commence construction of the Minimum Improvements no later than May 1, 2022 September 30, 2022. “Commence Construction” shall mean the start of soil corrections, site grading and installation of utilities. Subject to Unavoidable Delays, Developer shall have substantially completed the construction of the Minimum Improvements no later than April 30, 2023December 31, 2023. All work with respect to the Minimum Improvements to be constructed or provided by Developer on the Property shall be in substantial conformity with the Construction Plans and Developer will not modify the size or exterior appearance of the Minimum Improvements without the consent of the EDA and the City, which consent shall not be unreasonably withheld. 2. Except as provided for above, the terms and provisions of the Development Agreement shall remain in full force and effect. 3. This Second Amendment and all disputes or controversies arising out of or relating to this Second Amendment or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Minnesota, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Minnesota. 4. Nothing contained herein shall be deemed a waiver by the EDA of any governmental immunity defenses, statutory or otherwise. Further, any and all claims brought by Buyer or its successors or assigns, shall be subject to any governmental immunity defenses of the EDA and the maximum liability limits provided by Minnesota Statutes, Chapter 466. 5. This Second Amendment may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by the parties and delivered to the other parties. 6. This Second Amendment shall not be amended, modified or supplemented, except by a written instrument signed by an authorized representative of each party. [remainder of page intentionally blank]  IN AGREEMENT, the parties hereto have hereunto set their hands as of the Effective Date. SOUTH ST. PAUL ECONOMIC DEVELOPMENT AUTHORITY By ________________________________ James P. Francis Its President By ________________________________ Ryan Garcia Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this ____ day of ____________, 2022 by James P. Francis and Ryan Garcia, the President and Executive Director respectively, of the South St. Paul Economic Development Authority, a public body corporate and politic organized and existing under the Constitution and laws of Minnesota, on behalf of the EDA. Notary Public  BUYER: BECK PROPERTIES OF MINNESOTA LLC By: Name: Richard A. Beck, P.E. Its: President STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ____ day of __________________, 2022 by Richard A. Beck, P.E., the President of Beck Properties of Minnesota, LLC, a Minnesota limited liability company, on behalf of said limited liability company. Notary Public  EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property in Dakota County, Minnesota legally described as follows: 285 Hardman Avenue S., South St. Paul, MN 55075; PID: 36-48843-01-060 Lot Six (6), Block One (1), MISSISSIPPI LANDING 4TH ADDITION, according to the recorded plat thereof. Torrens Property  EDA Agenda Item Report Date: June 6, 2022 EDA Executive Director: _________ 4-C Agenda Item: 135 Grand Avenue East – Approval of Change Order #1 and #2 Action to be considered: Through consent, motion to approve Change Orders #1 & #2 from LinnCo for the 135 Grand Avenue East Demolition Project Overview: On October 18, 2021, the EDA awarded the bid for the demolition of 135 Grand Avenue East to LinnCo, Inc. in the amount of $317,000. At the time of award, all bids were based upon a walkthrough of the property, an ALTA Survey, and Phase II Environmental Documentation, but unfortunately no original construction drawings remained that would have documented subsurface structures or obstructions. In December 2021, a small amount of buried/unknown material was found beneath an overlay concrete slab in the upper level of the former parking garage, which needed to be tested for asbestos (it was determined not to be “hot”), necessitating a small change order. During a site visit at this time, City staff also determined that leaving the existing asphalt parking surfaces on the east and south sides of the site intact was desired, rather than disturb those areas at this time. These two scope modifications are articulated in Change Order Number 1, resulting in a net reduction in the Contract of $27,430.20 In May 2022, as site demolition commenced once the building was removed, a significant amount of subgrade structures were discovered. These concrete structures, previously unknown/undocumented, were by and large what appear to be massive sub-footing pads (all told there were 43 of these pads buried, previously unknown, and measuring either 12’x12’x2’ or 15’x15’x2’) that were cast in place at the time of construction (1930s) for the purpose of supporting the extremely heavy structure in substandard soils. In addition to these structures, an undocumented (and inactive) natural gas line ran along the foundations at the north and east sides of the building. This pipe was discovered to be wrapped in an insulative material suspect to contain asbestos. In addition, various and previously undocumented/unknown buried concrete vaults were discovered beneath the building slab, some containing a liquid suspected to be petroleum-based. Other miscellaneous sub-foundation structures were also discovered and scheduled for removal. Change Order #2 was prepared for all items except for the gas pipe, buried slab, and wood piling, all of which will be processed in a future change order pending results of additional due diligence. In total, Change Order #2 results in a net increase of $95,019.71 in the contract. Staff has reviewed the Change Order requests, pricing/unit sheets, and made multiple visits to the site during demolition and excavation to confirm these conditions. We suggest that in the absence of documentation prior to bidding it would have been impossible to expect – let alon estimate volume/cost for – such a significant amount of material in what would be atypical construction methods to be literally buried beneath the building slab. Staff suggests that, while painful, the CO is necessary. Funding Sources and other fiscal considerations: Demolition costs are an eligible redevelopment cost within the Concord Street #2 Tax Increment Finance District, of which 135 Grand Avenue East is a part. This TID has sufficient cash on hand to cover all costs of the demolition project. Taken together, the net impact of Change Orders #1 & #2 is $67,589.51 on the project cost. We do anticipate another change order to encompass the costs for pipe removal and any mitigation needed, wood piling removal, and buried slab removal. Staff is reasonably confident that Change Order #3 will come with less sticker shock than Change Order #2.  EDA Agenda Item Report Date: June 6, 2022 EDA Executive Director: _________ 4-D Agenda Item: Acceptance of HRA Properties between South Concord Exchange and Camber Avenue, Resolution 2022 - 4 Action to be considered: Approval of Resolution 2022-4 – Accepting the Transfer of Project Real Property from the Housing and Redevelopment Authority in and for the City of South St. Paul. Overview: As the EDA is aware, Staff continues to negotiate the sale of development property along South Concord Exchange with Watson Trading, LLC for a commercial development project. Currently, the development property is comprised of 10 distinct tax parcels, half of which are still owned in fee simple by the Housing and Redevelopment Authority (HRA). To simplify the eventual purchase/sale and development of this property, Staff proposes conveying the HRA property to the EDA and combining the 10 tax parcels into a single lot through an administrative lot split process. Funding Sources and other fiscal considerations: The costs of administering this transfer are drawn from the EDA’s Professional Services budget for 2022. Future transfer and recording costs (when the properties are sold over time for development) will be worked into the real estate closing costs and absorbed by the buyer or seller as a part of the transaction.  SOUTH ST. PAUL ECONOMIC DEVELOPMENT AUTHORITY DAKOTA COUNTY, MINNESOTA RESOLUTION NO. 2022-4 RESOLUTION ACCEPTING THE TRANSFER OF REAL PROPERTY FROM THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF SOUTH ST. PAUL WHEREAS, the Housing and Redevelopment Authority of the City of South St. Paul (the “HRA”), in connection with the HRA programs and projects (“Programs”) acquired certain properties identified as PIDs: 36-75100-10-020, 36-75100-10-030, 36-75100-10-040, 36-75100- 10-060 and 36-75100-10-061 (“Project Properties”), which are currently held in title by the HRA; and WHEREAS, the City Council transferred all administration of HRA Programs to the South St. Paul Economic Development Authority (the “EDA”) by City Council Resolution No. 2015- 197; and WHEREAS, the EDA desires to acquire title to all Project Properties from the HRA in order to provide Program efficiency; and WHEREAS, the HRA has adopted a resolution authorizing the conveyance of the Project Properties to the EDA; and NOW, THEREFORE, BE IT RESOLVED by the South St. Paul Economic Development Authority that the required officers of the EDA are authorized to execute the necessary documents to accept the transfer and conveyance of title to the Project Properties listed above from the HRA and to record the deeds accordingly. Adopted this day of , 2022. _______________________________ James P. Francis President _______________________________ Ryan Garcia Executive Director Orientation Map  EDA Agenda Item Report Date: June 6, 2022 EDA Executive Director: _________ 5-A Agenda Item: Approval of Updated Economic Development Revolving Loan Fund Policy Action to be considered: Motion to approve an updated Economic Development Revolving Loan Policy as presented. Discussion: In August 2021, the EDA adopted Resolution 2021 – 18 which authorized the EDA to administer a modified Business and Development Loan Program for certain economic development activities. This program was established in the early 2000s by the HRA and has assisted at least 35 businesses since that time. Despite the program’s ample funding, the program has been underutilized in recent years at least in part due to declining commercially available interest rates, and there is only one active and current loan in the portfolio (Quik-Serv License Center). As discussed at the April 11, 2022 and May 9, 2022 worksessions, staff proposes that there are ways to modify the structure of the loan program in an effort to boost participation. As the Council will recall, the Program currently allows an applicant to apply for no less than $5,000 nor more than $150,000 in EDA assistance. The April and May discussion was quite fruitful; members expressed an interest in not only broadening the Program’s reach, but also in avoiding a situation where all of the Program’s funds were tied up in only a very small number of larger loans. Based upon that discussion, Staff is suggesting a change to the Program and Policy that would give the EDA the latitude to extend financing for as little as $1,000 and beyond $150,000 in order to have a broader reach in assisting businesses. Staff is suggesting that between $200,000 - $250,000 from the total loan pool (of approximately $950,000) be designated specifically for what we would consider “micro loans” – loans to businesses for amounts ranging from $1,000 - $15,000. The remainder of the total loan pool would be made available for loans between $15,000 - $150,000 typically, unless a project can demonstrate that it provides exceptional community and economic benefit. “Micro Loans” Staff is suggesting the establishment of a “Micro Loan” program which would be a subcomponent of the Business & Development Loan Program and would be targeted for emerging, small businesses needing relatively a small amount of capital in the early stages of their growth. Staff suggests that for the Micro Loan, the EDA may commonly be the only source of outside financing for a business and may be structured as “non-recourse” loans. As such, the EDA in this case would be accepting perhaps a slightly greater level of exposure and risk when making loans. Staff proposes the following general parameters for the Micro Loan: • Loan amounts $1,000 - $15,000 per business • Interest Rate: Prime + 2.5% (currently WSJ Prime is 4.00%) • Loan repayment terms between 3 to 7 years • For businesses with 50 or fewer employees • Eligible uses: o Working Capital o Inventory o Machinery/Equipment  o Energy upgrades o Façade Improvement o General Operations Loans Exceeding $150,000 for “Catalytic” Projects Currently, the EDA’s Business and Development Loan Program is structured such that an applicant can apply for no more than $150,000 in EDA assistance. In part, this limit was established in an effort to “streamline” the process for applicants by avoiding the more rigorous requirements of Minnesota’s Business Subsidy Policy, which requires any assistance greater than $150,000 to be treated as a business subsidy (subject to a public hearing as well as annual reporting requirements). Staff continues to believe that in most cases, this approach is prudent and makes the program most nimble and attractive. However, we would like for the EDA to consider whether larger loans might be considered in specific, potentially “catalytic” circumstances. Namely, we are suggesting a change that would allow the EDA to extend financing beyond $150,000 if all of the following conditions are met: • The proposed project meets two (2) or more of the Eligible Activities listed in Section IV of the Loan Policy. This section of the policy establishes the following as “Eligible Activities”: o Creation or retention of jobs; or the improvement of jobs as measured by wages o Acquisition of land and buildings o New Construction o Façade and building renovations, including renovations to address code deficiencies o Purchase and installation of machinery and equipment o Clearance, demolition, or removal of structures o Infrastructure improvements necessary to support new or expanding businesses • The proposed project is located within one of the Priority Areas listed in Section VI of the Loan Policy/ This section of the policy identifies the following as “Priority Areas”: o Concord Street between Annapolis Street and Wentworth Avenue o Southview Boulevard and Marie Avenue o Concord Exchange o Concord Street between Dale Place and Linden Avenue • The proposed project involves the renovation and/or reinvestment in a building constructed more than 35 years prior to the date of application; and • Where required by State Law and the City’s Business Subsidy Policy, the proposed project will be subject to an Approved Business Subsidy Agreement. Funding Sources and other fiscal considerations: The Existing Loan Program is almost “reset”, having only two outstanding loans (at about $80,000 total) and over $720,000 in cash balance. Additional discretionary funds within the EDA that have no program tied to them amount to approximately $195,000. In short, there is almost $1,000,000 in existing “seed” money for a business assistance program. The EDA could choose to sustain/grow this account by dedicating levy dollars in the annual budget process in future budget years.  Economic Development Revolving Loan Fund Program Policy Established August 2021 Most Recently Updated June 2022 Each application submitted for assistance will be evaluated by the City on a case-by-case basis to analyze the viability of a proposed project. Depending on the nature and complexity of a project, the timeframe from application to approval is approximately 8 to 12 weeks.  I. General The South St. Paul HRA first established a Revolving Loan Fund (RLF) Program in the early 2000s. The program aimed to increase job creation and enhancement of the property tax base. The program was intended to be a “supplement”- not a replacement- for owner/investor equity and bank financing in a project. Today, the RLF is administrated by the South St. Paul Economic Development Authority (EDA). The Economic and Community Development Department will provide general program oversight on behalf of the City and EDA. II. Program Purpose The goals of the revolving loan fund are to stabilize and increase the City’s tax base, create and retain permanent private sector jobs and improve economic opportunities by promoting local business development and expansion, add additional skilled workers with wages above the median income, support business enhancements, and provide support for local business retention. III. Funding Available The minimum loan amount of a loan through this program is $1,000. The maximum amount of a loan from this program is $150,000, except that a greater maximum loan amount may be approved by resolution of the EDA if all of the following are true: • The proposed project meets two (2) or more of the Eligible Activities listed in Section IV of this Policy; • The proposed project is located within one of the Priority Areas listed in Section VI of this Policy; • The proposed project involves the renovation and/or reinvestment in a building constructed more than 35 years prior to the date of application; and • Where required by State Law and the City’s Business Subsidy Policy, the proposed project will be subject to an Approved Business Subsidy Agreement. IV. Eligible Activities Through consultation with EDA Staff and (as appropriate) lending partners and consultants, applicants will be eligible to apply for one of two fund types: the “Business and Development Loan Fund” and the “MicroLoan Fund”. Eligible Activities for each of the two fund types are provided below: A. Business and Development Loan - In order to apply for financing assistance through the Business and Development Loan Fund, a business must be a for-profit enterprise. Eligible projects must meet one or more of the following activities: 1. Creation or retention of jobs; or the improvement of jobs as measured by wages. 2. Acquisition of land and buildings. 3. New Construction 4. Façade and building renovations, including renovations to address code deficiencies. 5. Purchase and installation of machinery and equipment. 6. Clearance, demolition, or removal of structures. 7. Infrastructure improvements necessary to support new or expanding businesses.  B. MicroLoan – In order to apply for financing assistance through the MicroLoan Fund, a business must be a for-profit enterprise and have fifty (50) or fewer full-time equivalent employees on its payroll. The following activities are potentially eligible for assistance from the MicroLoan Fund: 1. Working Capital. 2. Inventory. 3. Façade and building renovations, including renovations to address code deficiencies. 4. Purchase and installation of machinery and equipment. 5. Energy Efficiency Upgrades. 6. General Operations. V. Ineligible Activities Certain projects, activities, and costs are ineligible for revolving loan funds. These include: 1. Refinancing or consolidating existing debt. 2. Reimbursement for expenditures prior to loan approval. 3. Routine maintenance. 4. Specialized equipment that is not essential to business operation. 5. Management fees. 6. Projects in stand-alone residential buildings. VI. Priority Areas 1. Concord Street between Annapolis Street and Wentworth Avenue 2. Southview Boulevard and Marie Avenue 3. Concord Exchange 4. Concord Street between Dale Place and Linden Avenue VII. Priority Considerations 1. Assisting Business Expansion- Commercial or industrial-related expansions (ie, adding square footage or employees), and related costs. 2. Renovation to and/or reinvestment in a building constructed more than 35 years prior to the date of application  3. Business equipment acquisition- The purchase of additional depreciable assets for the purpose of expanding industrial/commercial activities. VIII. Loan Financing Policies and Conditions A. Business and Development Loan – the following loan terms and conditions will apply to the Business and Development Loan: 1. The minimum loan amount is $15,000. 2. The maximum loan amount is $150,000, except as stated in Section III (Funding Available) of this Policy. 3. Loan terms for fixed assets are anticipated to range between 10 to 20 years for land and buildings, and 5 to 10 years for machinery and equipment. 4. Interest rates are fixed at 5.50%, subject to the following interest rate discounts, which may be combined: a. Applicants committing 15% or more in cash equity to a project will receive a 0.50% discount on their interest rate. b. Projects that have been approved for financing from a private commercial lender for at least 60% of the total project cost will receive a 0.25% discount on their interest rate. c. Applicants that are able to demonstrate that they have consulted with the “Open to Business” program, free to all South St. Paul residents and businesses, will receive a 0.25% discount on their interest rate. d. Applicants that are able to demonstrate that their project will result in a property value increase of 15% or more will receive a 0.50% discount on their interest rate. (Dakota County Property Taxation & Records can assist with this analysis.) e. Applicants that are able to demonstrate that their project will result in the creation of three (3) or more new jobs at or above the “2 Working Adults, 2 Children” Living Wage Calculation for Dakota County will receive a 1.00% discount on their interest rate.  f. A 0.50% discount on interest will be provided for any project that involves any one or more of the following: i. Installation of an elevator in a multi-story building. ii. Installation of fire suppression systems. iii. Installation of environmental infrastructure, such as vapor mitigation systems. iv. Abatement of hazardous building materials, such as asbestos. v. Installation of solar, geothermal, or wind energy systems or technologies. vi. Installation of commercial food preparation facilities and required ventilation systems. vii. Vertical commercial/residential mixed-use development (i.e., commercial unit(s) at the street level with residential unit(s) on upper level(s)). 5. For projects that demonstrate extraordinary public benefit, the EDA may choose to structure loans in such a way as to provide applicants/borrowers with deferred repayment, interest-only repayment periods, or partial loan forgiveness. 6. Interest earnings or other profits earned from the sale of the loan will be returned to the RLF fund for re-lending or for administrative costs. 7. The EDA may deny any project which it deems inappropriate according to the guidelines established in this document. B. MicroLoan Fund - the following loan terms and conditions will apply to the MicroLoan: 1. The Minimum Loan Amount is $1,000. 2. The Maximum Loan Amount is $15,000. 3. Loan terms are anticipated to range between 3 to 7 years. 4. Interest rates are fixed at the WSJ Prime Rate + 2.500%.  IX.Loan Application and Review A. Pre-application or Preliminary Meeting- A pre-application is required to screen potential projects for eligibility. 1. A brief pre-application in narrative form will be required for all potential applicants in order to determine the proposed structure and eligibility of the project. 2. Pre-applications may be submitting on an open basis throughout the year. B. Applications A full application requires the following documents, unless waived by the EDA through the pre- application process: • Company description including product or service, history, legal structure, ownership and subsidiaries. • A detailed business plan describing the scope of the project including site plans, building plans, renderings or blueprints. • Project budget and amount of loan request. • Proof of private financing commitment. • Payment of an Application Fee equivalent to $125 + 2% of the requested loan amount, not to exceed $1,250 total. Application fees will be non-refundable, and will not simply be “rolled into” the loan amount. • Other documentation as requested. C. Loan Review Committee. A loan review committee as designated by the EDA will be responsible for the review and recommendation of approval or denial of any loan application. D. Incomplete Application. Department Staff will determine if the application is completed. X.Distribution of Funds to Approved Applicants A. Loan Agreement Prior to the EDA’s distribution of RLF funds, all appropriate documentation, including loan agreement, promissory notes, repayment schedule, security agreement, personal guaranty, and all other documents deemed necessary, shall be prepared and executed. B. Evidence of Expenditures The business must provide documentation related to the RLF fund expenditures prior to the release of RLF funds. Documentation may include invoices, receipts, final bills of sale, cancelled checks, a lien waiver or other documentation as deemed appropriate by the review board. XI. Repayment and Default A. Repayments All payments are due within 30 days of the billing date. The first billing will be within 45 days after the funds have been released. B. Prepayments of Loans There is no prepayment penalty. C. Late Payments Any payments not paid within ten (10) days of the due date will pay a late fee equal to 5% of the amount of the installment due. Loan recipients will be contacted by staff requesting the account is brought current. After 21 days, staff will send a letter requesting full remittance of late payments.