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HomeMy WebLinkAbout03.20.13 EDA Bank Summit 4I i� City of Farmington '� a 430 Third Street i f Farmington,Minnesota �,, 4ei 651.280.6800•Fax 651.280,6899 •A pRaS www.ci.fannington.mn.us TO: Ms. Lisa Franxman and Mr. Jim Friend—Anchor Bank Mr. Dan Nicolai, Sr. and Mr. David Nicolai—Castle Rock Bank Mr. Brandon J. Wilcox—Premier Bank Mr. Kevin Kuboushek and Ms. Christy Doe—Roundbank FROM: City of Farmington Economic Development Authority Lee Smick, Staff Liaison DATE: March 13, 2013 RE: City of Farmington Bank Summit First and foremost,the City of Farmington Economic Development Authority(EDA)would like to thank Anchor Bank, Castle Rock Bank,Premier Bank, and Roundbank for accepting our invitation to Farmington's inaugural Bank Summit to be held on March 20,2013 at 2:00 PM at City Hall. The EDA recently approved its strategic plan with the principal focus of working towards the following: diversifying the tax base, creating a broad range of employment opportunities,providing necessary goods and services to local residents, ensuring the highest"quality of life"possible for our residents and businesses, and promoting a positive image of the city in general, and its business environment in particular. Through this focus,the EDA feels strongly that the diversification of the tax base may be accomplished through a number of avenues, in particular,the opportunity to entice and retain commercial and industrial businesses to and within Farmington through the offering of business incentive funding. These incentives may be offered in the public or private realm involving partnerships with local, county, state, non-profit, and lending institutions. The EDA has recently seen great opportunities in forming partnerships to further economic development in our community. The EDA is currently creating its own business incentive program and they would like to know if you would be interested in participating in this creation process. The EDA has purposely invited our community banks to the summit to benefit from the GROW Farmington initiative to"Buy, Live, Local"and keep funding partnerships in our own backyard. The purpose of the summit is to gather these partners into one forum to engage the attendees in the following areas: 1) Become familiar with business incentive funding at the private, local, county, and state levels. 2) Develop potential incentive programs to entice and retain commercial and industrial businesses to and within Farmington. 3) Provide business owners and entrepreneurs with an"incentive menu"describing the types of funds offered in Farmington through public and private financing that will help businesses to visually pick and choose loan possibilities with ease, providing a streamlined"at your finger tips" service to our businesses. 4) Learn from each other and develop strong partnerships to provide funding opportunities to our local business owners and entrepreneurs. 5) Schedule further meetings to develop the partnerships and incentive funding. The EDA has invited the State of Minnesota's Department of Employment and Economic Development (DEED),the Dakota County Community Development Authority(CDA), and the Metropolitan Consortium of Community Developers (MCCD)to the summit to briefly discuss their business funding programs, in the hope that Bank Summit attendees are both informed and develop an interest in partnering together on these programs. The EDA would also like to hear from you, our local banks,to learn about your lending programs and to possibly partner with your lending efforts. The initial discussions during the meeting will include City staff informing the summit attendees about funding incentives in communities throughout the state such as: Development Assistance Loans offered through the City of Jordan where three very active commercial lenders provide financing for a wide range of economic development projects,the City of Hastings' Commercial Rehabilitation Loan, and the City of Belle Plain's Façade Improvement Loan, all offered as partnerships with the City and local lenders (see attached). These incentive offerings will be introduced to the attendees to generate ideas for economic development grants or loans in our community businesses and provide City and local lenders the opportunity to partner in this endeavor. The State of Minnesota's Department of Employment and Economic Development(DEED)will be on-hand to discuss their Emerging Entrepreneur fund which supports micro-enterprises and small businesses in the state. DEED works through non-profits to provide funding to them, which in turn,provides funding to the local businesses and entrepreneurs. They also oversee the state's Small Business Association's loan programs. The Community Development Block Grant fund administered by the Dakota County Community Development Authority through funding by the Federal Government's Housing and Urban Development department will also be discussed(CDA)briefly for information on their programs which may generate funding ideas for the attendees. Finally,the EDA is supporting opportunities for business owners and entrepreneurs to work with non-profit associations. Farmington has recently partnered with the Metropolitan Consortium of Community Developers (MCCD) located in Minneapolis,but now operating in Dakota County. MCCD is a 43 member non-profit community development agency committed to increasing funding opportunities for development of quality, community-based projects. The City was recently informed of this partnership opportunity by the Dakota County CDA,who pays for half of the funding program known as Open to Business administered by the MCCD. The City has extended funds to this program as well as the rest of the communities in the county. The Open to Business program is designed to provide intensive one-on-one technical assistance to Farmington's business owners and entrepreneurs who intend to establish,purchase, or improve their business in the City. The Open to Business program offers the City's business owners and entrepreneurs' technical assistance in the following areas: business plan development,feasibility analysis, marketing,cash flow and other financial projection development, operational analysis, City and State licensing and regulatory assistance, loan packaging, and help obtaining competent legal advice. Included in the loan packaging assistance,the MCCD operates a small business loan fund that can help Farmington's business owners and entrepreneurs access the capital they need to grow their businesses. In doing so,the MCCD develops partnerships with local banks to help businesses obtain bank loans and revolving lines of credit. As a participant in MCCD's Open to Business program,the City hopes to promote more effective access to capital for our local businesses by introducing the MCCD to Farmington's community banks. The outcome of the meeting will include the development of relationships with all attendees,the education of various incentive opportunities through grants and loans,the potential partnership between the local banks and the City of Farmington including the MCCD, and the formulation of an incentive menu for incentive offerings in Farmington. If you have any questions concerning this information, please do not hesitate to contact me at(651) 280-6820 or lsmick@ci.farmington.mn.us. Sincerel , ee Smick,AICP CNU-A City Planner/Economic Development Cc: Economic Development Authority Mayor Todd Larson Council Member Doug Bonar Steve Wilson Jeri Jolley Kirk Zeaman Bart Bevins, DEED Lisa Henning, CDA Lee Hall, MCCD Mark Loftus, Dakota Electric David McKnight, City Administrator Robin Hanson, Finance Director Z goy a �G'ROW 'el..A ppoO Farmington BANK SUMMIT AGENDA March 20, 2013 2:00 P.M. Farmington City Hall Anchor Bank, Castle Rock Bank, Premier Bank, Roundbank Metropolitan Consortium of Community Developers(MCCD) State Of Minnesota Department of Employment and Economic Development(DEED) Dakota County Community Development Authority(CDA) 1. Welcome and Introductions 2. Overview of Agenda and Objectives 3. Incentive Offerings from Metro-Wide Communities a. EDA Programs-Business Subsidy Policy b. Tax Abatement c. Business Incentive Grant 4. State of Minnesota DEED Entrepreneur Fund 5. Dakota County CDA Programs a. Commercial Rehabilitation Grant b. Business Development Grant 6. MCCD Open to Business Program 7. Adjourn City of Jordan's Development Assistance The City of Jordan promotes local economic development via the Jordan Economic Development Authority. City staff are eager to assist businesses with tax increment and tax abatement financing, site selection, and other key components of business growth. Three very active commercial lenders in Jordan, Frandsen Bank, HomeTownBank, and Riverland Bank, whose financial strengths benefit a wide range of economic development projects. The EDA has recently become a member of the Twin Cities Community Capital Fund (TCCCF) which is a nonprofit loan fund that offers customized, flexible financing solutions for gap financing. A business in Jordan can borrow up to $500,000 with the invitation from a bank. Please contact the City for more information. With a TCCCF loan you can finance: • Fixed assets • Building construction • Leasehold improvements and building renovations • Machinery and equipment purchases, renovation, and moving expenses • Working capital yy o '--: i r--V.. It iTi ./.1.4b)'� Apo i '�!.r. to :; COMMERCIAL REHABILITATION PROGRAM SUMMARY 01< sry ,,, The program provides financial assistance for the rehabilitation of commercial or i 44 '3 ; �hi, mixed use properties located in a redevelopment project area The types of work y g �{ that may be included are: t i:_' e'` " 1. Eliminate blight or correct structural,safety and access conditions ''"'"' 41 '1'11^" * 2. Remodel interior space for new uses and tenants r,,.,---. ,I •;-;4,1 3. Bring building systems up to code and conserve energy "o st', (01,`4: 71q'r';. �l i 4. Improve the design and materials of the exterior,including historic restoration ,T *a'`�'it 'di,"`i`', I s` � .���� � 5. Improve affordable apartments in mixed use buildings as a secondary purpose `"`I:aI`;)F4. 6. Moveable fixtures and equipment are not included Conditions of the program POUCE DEPARTMENT 1. The building must qualify in size and location. 1503rd Street Eost i 2. The need for public assistance to make the project feasible must be 651.480.2300 demonstrated. i]EP,AI 'Mnbl 3. The project must contribute to the redevelopment area plan. rum 1155th Street West 4. City planning, building and historic(if required)approvals must be secured. 651,4804150 DEPARTMENT OF Forms of assistance P@MUCoR[ts 1. Make direct loan to the property owner 1225 Progress Drive 2. Participate with another lender for above purposes OPERATIONS 3. Reduce the interest rate on a loan for above purposes 651.480.6185 ErAIGINEERING Usual sual Terms 1. A direct loan from HEDRA will provide supplementary or gap financing,not the DEPARTMENT PARKS&RECREATION primary financing.Typically the loan amount may be up to 25%of costs but no 920 10th Street west more than$200,000.The Board will determine the size of the loan,depending 651.480.6175 on scope of project and public funds available. 2. The direct loan is an installment loan normally with a term of ten years,but can be no more than 20 years.Interest starts at 0%for the first year,then for four years and 9%for five years. 3. When the rehabilitation loan is available from a private lender HEDRA will consider an interest reduction payment rather than a direct loan.The amount of the assistance is calculated on the amount of interest to be paid on the loan, to a limit of$30,000 per building. Repayment of the assistance is made at the sale of the property. 4. Loans and interest reduction payments are secured by agreements and mortgages. i v _ °_ ® f stook . . . . Be 1e Plaine CATY OF _. ,.. .,.,. . . City of Belle Plaine Economic Development Authority FACADE IMPROVEMENT LOAN PROGRAM Revised November 1, 2010 — -19,... .,:„.,„ 3, 4 fr I SIAL.P .A171,61 1 ‘ , '',•,:.:::tt.I.W:t*:;4!:v., „ ,;',:;‘ ' 1 ' .,.:*.. ,, , 0, i .. ',BERGER INTERIORS ..,, . ., ,,;,., 1.1 , i , ,-_,,2:4;f:v1:0:41:".;,-;•-.,- ,..,'.....,_:,-,4-,-. . - t,- i 7, - IIP!, ,,,: 4-,, Pit,s' '- -01 .. .... ,, ,, , , 7-i-,-IT;:• l'-.D ' - -- - ..,... • . i .._ ,__ _____ :'-----:'---Th'''' —717–-..'..--:' I ":"";°-":"',„,... – •: 1 ' '' __ 244,,w„,,T.1:1 1..tol&ne SC.imams% . 41-21)P3a-,911,,t itf:::, IS'AI:=0 "It 4:045074,414* t':.:A.::,:.'l ,, ■ IN 7■1111147:1= t ‘16°Im"swgraelw"vmamale"2"9"1°' ,..-.,.. . :- i'^:isiiiiig, Policy and Procedures FACADE IMPROVEMENT LOAN PROGRAM Belle Plaine Economic Development Authority(BPEDA) In and For the City of Belle Plaine Purpose The purpose of the Facade Improvement Loan Program is to establish a loan program to provide the capability and incentive for owners and tenants of new and existing businesses to upgrade the appearance of their places of business,thereby improving their marketability and promoting redevelopment of new and existing business properties within the City. Duration Loans may be made under these policies to the extent that funds are available, as allocated to the fund by the BPEDA. Nature of Loans Staff will review each loan application. The loans will be allowed only for facade improvements of businesses within the City limits of Belle Plaine. The maximum amount for the loan is$1,500 per business per calendar year. The loan will require a 1:1 match of the applicant, either through personal funds or a loan from a lender. Goals for the Use of Loan Funds By providing loans for façade improvements to existing and new businesses,the BPEDA has established the following goals: 1. The project will improve the façade of the business,thereby protecting property values. 2. The project will promote the retention of existing businesses and promote new business establishment. 3. The project will remove, prevent or reduce blight. 4. The projects may not be nonconforming uses and must be generally consistent with the City of Belle Plaine's Comprehensive Plan. 5. The projects will not significantly or adversely increase the impacts on existing service needs in the City. 6. The projects must meet the design guidelines established by the Belle Plaine Zoning Ordinance. Applicant Eligibility Applicants may be individual owners, partnerships, corporations,tenant operators, or contract for deed purchasers of property and building within the City of Belle Plaine, but must provide all documentation of entity status requested in the application form. The applicant's property must be of conforming use or a legal non-conforming use under the Belle Plaine Zoning Ordinance. Belle Plaine Economic Development Authority Façade Improvement Loan Policy and Application Page 2 Eligible Improvements for Use of Funds Loan funds may be used to improve the exterior appearance of buildings and property within the City of Belle Plaine. The definition of"facade" is used to assist in determining what eligible improvements are.The definition of"facade", according to the Merriam-Webster online dictionary, is the: 1)front of a building; also : any face of a building given special architectural treatment or 2)a false, superficial, or artificial appearance or effect. 1. Improvements may include, but are not limited to the following list.All eligible improvements must be visual from the adjacent public street.Awnings 2. Painting 3. Residing 4. Window replacement/repair 5. Brick replacement/repair 6. Stucco replacement/repair 7. Signage 8. Roofs 9. Door replacement/repair 10.Siding replacement/repair 11. Exterior lighting 12. Labor or design of the qualifying improvements Ineligible improvements include: 1. Any interior work 2. Landscape improvements, including plants or planters 3. Building improvements not visible from the public street 4. Building additions/new construction 5. Improvements completed or in progress at the time of application 6. Building acquisition 7. Exterior painting, except for painting related to other eligible improvement 8. Routine maintenance 9. Mechanicals and HVAC systems 10.Trash and mechanical enclosures Belle Plaine Economic Development Authority Facade Improvement Loan Policy and Application Page 3 Payment of Loan The applicant must determine if a building permit is required for the proposed work to be done. If a building permit is required, it must be obtained concurrently with application for loan funds. If the façade improvement is located within the B-3, Central Business District,the proposed improvements must be approved by the Design Committee. The applicant must submit the invoice or bill (or copy)for the improvement to the Community Development Director. The City will process a check for one-half of the amount of the bill up to $1,500. The check will be forwarded directly to the company or the vendor of the product. Under no circumstances will the applicant be directly reimbursed for work done, nor will work completed prior to approval of the application be allowed to qualify for the loan funds, unless approved by the EDA with reasonable justification by the applicant as deemed necessary by the Commission. Repayment of Loan The amount of the loan (without interest)will be due and payable to the Belle Plaine EDA one (1)year following the distribution of loan funds. If, however,the business to which the loan was granted remains in business in the improved building one (1)year following the distribution of loan funds or the applicant transfers ownership to another entity that maintains the business in the improved building for at least one (1)year following the distribution of loan funds,the loan shall be forgiven by the Belle Plaine EDA. Conflict of Interest The applicant shall submit the name(s) or the owner(s), shareholder(s), partner(s), sole proprietor, corporation member(s),or other person(s) or business(es)with any financial interest in the project and its financing in order to preclude any conflict of interest in the loan review and approval process. Right to Deny The BPEDA has the right to deny any application based on their discretion. Belle Plaine Economic Development Authority Façade Improvement Loan Policy and Application Page 4 FACADE IMPROVEMENT LOAN PROGRAM APPLICATION FOR FUNDS Belle Plaine Economic Development Authority Company Information: Name of Business: Current Address: Telephone: E-mail Primary Contact Person: Title: Telephone: Nature of Business: Form of Business Organization: ❑ CD Purchaser ❑ Tenant Operator ❑ Other ❑ Sole Proprietorship ❑ Limited Partnership ❑ Partnership ❑ Corporation (Cooperative) Number of Employees: Total: Full-Time: Part-Time: Property Owner(s): Number of years in businesses in Belle Plaine: Project Description: Briefly describe the nature of the project: Approximate Amount Requested: Funds to be used for: Belle Plaine Economic Development Authority Facade Improvement Loan Policy and Application Page 5 Is the proposed building a conforming use or legal non-conforming use under the City of Belle Plaine's Zoning Ordinance? ❑Yes ❑ No What is the estimated completion date for the project?: I have read, understand, and agree to comply with the Policy for the Façade Improvement Loan Program of the Belle Plaine Economic Development Authority and the City of Belle Plaine. Applicant Signature Applicant Name (printed) Property Owner Signature Property Owner Signature Date For Office Use Only: ❑ Invoice submitted: ❑ Reviewed by: Approved: Amount: Denied: Date Paid: ❑ Reviewed by Design Committee Approved: Denied: Belle Plaine Economic Development Authority Façade Improvement Loan Policy and Application Page 6 ;Depahment o[Employment i p si V `"nmdEconomic Development mnesota Emerging Entrepreneur Fund (EEF) Program To provide financing for small and micro-businesses that are starting up or expanding Purpose: throughout Minnesota, placing special emphasis on underserved communities. How it Works: The MN Department of Employment and Economic Development (DEED) has received federal funding though the U.S. Department of the Treasury and has partnered with approved lenders to increase debt financing activity. Eligible Businesses with fewer than 500 employees company-wide are eligible; however the Applicants: funding is focused on microenterprises and businesses with fewer than 50 employees. The fund targets underserved small business communities including those in economically distressed areas as well as minority and women-owned businesses. Target It is expected that the many of the businesses receiving financial support through this Guidelines: program will be owned and operated by a woman or a minority; or that they will be located in areas identified by DEED as distressed. Distressed areas are measured by population loss, higher than statewide average unemployment rate, and lower than statewide median household income. Eligible Start-up costs, working capital, business procurement, franchise fees, equipment, Projects: inventory, as well as the purchase, construction renovation, or tenant improvements of an eligible place of business that is not for passive real estate investment. Projects that include passive real estate are only allowed on a limited basis as determined by U.S. Department of the Treasury guidelines. Financing of existing debt is not permitted. Funding The EEF funds may total up to $150,000 per loan and must be matched on at least a one- Available: to-one basis. Participating lenders in the EEF program are encouraged to structure their loan proposals to achieve at least a 5:1 leverage of DEED/Treasury funds. Interest Each qualified program lender has the authority to determine the specific interest rate and Rate/Terms: collateral requirements within program guidelines. Application Qualified lenders accept applications on a rolling basis. Application forms and procedures Process: will vary with the lender. Interested businesses should apply with the participating lender. DEED is notified of all loans approved by the participating lenders. Website: www.positivelyminnesota.com/ssbci Contact: Bart Bevins, Emerging Entrepreneur Fund MN Department of Employment and Economic Development (DEED) Phone: 651-259-7424 or 800-657-3858 E-Mail: Bart.Bevins @state.mn.us Business and Community Development Division 1st National Bank Building • 332 Minnesota Street,Suite E200 • Saint Paul,MN 55101-2146 USA www.positivelvm innesota.com Toll Free:800-657-3858 • Phone:651-259-7424 • Fax:651-296-5287 • TTY:651-296-3900 An Equal Opportunity Employer and Service Provider in P 'v Department et Emptayment J and Economic Development . innesta Page 1 of 2 SSBCI Emerging Entrepreneurs Fund Approved Lenders African Development Center of Minnesota Metropolitan Consortium of Community 1931 South 5th Street Developers Minneapolis, MN 55454 3137 Chicago Ave. Mr. Nasibu Sareva Minneapolis, MN 55407 Phone: 612-333-4772 Mr. David Chapman FAX: 1-877-853-3233 Phone: 612-789-7337 www.adcminnesota.org FAX: 612-822-1489 www.mccdmn.org Headwaters Regional Development Commission 403 4th Street NW, Suite 310 Metropolitan Economic Development Association P.O. Box 906 250 Second Ave. S., Suite 106 Bemidji, MN 56619 Minneapolis, MN 55401 Ms. Tiffany Fettig Ms.Jan Jordet Phone: 218-444-4732 Phone: 612-332-MEDA(612-332-6332) FAX: 218-444-4722 Fax: 612-317-1002 www.hrdc.org www.meda.net Initiative Foundation Midwest Minnesota Community Development 405 First Street Corporation Little Falls, MN 56345 119 Graystone Plaza, Suite 100 Mr. Dan Bullert Detroit Lakes, MN 56501 Phone: 320-632-9255 Ms. Nicole Kirchner www.ifound.org Phone: 218-847-3191 FAX: 218-844-6345 Latino Economic Development Center www.mmcdc.com 1516 E. Lake Street,Suite 201 Minneapolis, MN 55407 Neighborhood Development Center Mr. Ramon Leon 663 University Ave., Suite 200 Phone: 612-724-5332 Saint Paul, MN 55104 FAX: 612-724-5342 Mr. Brian Singer www.ledc-mn.org Phone: 651-291-2480 Fax: 651-291-2597 www.ndc-mn.org Business and Community Development Division 1st National Bank Building • 332 Minnesota Street,Suite E200 • Saint Paul, MN 55101-2146 USA www.positivelyminnesota.com Toll Free:800-657-3858 • Phone:651-297-0000 • Fax:651-000-0000 • TTY:800-000-0000 An Equal Opportunity Employer and Service Provider * , , x., `t �. ,. 't �u ;° ,., Vie. .,+ a f,, + ,,,.�., .t a r� . 11: .*VP:";h5,,T,...5e,e-‘,,,4 *`:.'.&)?5:': 1": . '‘`.44:4#.:Tigk',4 --44 ' inneso-ti,t4 ',,-.,..-..,,:,,,..,,,„ ,,,, , ,, ,,, _, , ,z t,--, o `c -Department of Employmen vy a �� ' ;�IY t ��� � p al Y and Economic Development a S, " �',. ., ," -- Northeast Entrepreneur Fund, Inc. dba Entrepreneur Fund 8355 Unity Drive,Suite 100 Virginia, MN 55792 Ms. Carla Tichy—Finance Manager Phone: 218-749-4191 or 1-800-422-0374 www.entrepreneurfund.org Southern Minnesota Initiative Foundation 525 Florence Ave. Owatonna, MN 55060 Ms. Diane Lewis Phone: 507-455-3215 FAX: 507-455-2098 www.smifoundation.org Sparc 855 Rice Street Saint Paul, MN 55117 Ms. Alison Sharkey Phone: 651-488-1039 FAX: 651-488-6309 www.sparcweb.org WomenVenture 2324 University Ave. W. Saint Paul, MN 55114 Ms. Alyssa Samuelson Phone: 651-646-3808 www.womenventure.org Page 2 of 2 Business and Community Development Division 1st National Bank Building • 332 Minnesota Street,Suite E200 • Saint Paul, MN 55101-2146 USA www.positivelvminnesota.com Toll Free:800-657-3858 • Phone:651-297-0000 • Fax:651-000-0000 • TTY:800-000-0000 An Equal Opportunity Employer and Service Provider Minnesota Investment Fund Program Program To create new and retain the highest quality jobs possible on a statewide basis Purpose: with a focus on industrial, manufacturing and technology related Industries. Funding Department of Housing and Urban Development (HUD), Small Cities Development Sources: Program (federal funds) and Minnesota Investment Fund (MIF) Revolving account (state funds), which is repayments from state funded projects. How It Funds are awarded to local units of government, which provide loans to assist Works: expanding businesses. Cities, counties, townships and recognized Indian tribal governments are eligible applicants. When state funds are used, the grantee may retain 20% of the loan principal and interest repayments up to $100,000. When a project is awarded with federal funds the grantee retains all of the principal and interest repayment. Determinations as to the source of funding used are made by DEED. Eligible Loans are made for land, buildings, equipment and infrastructure necessary Projects: to support business expansions. Ineligible Working capital, refinancing of existing debt, retail businesses, casinos, sports facilities Projects: and industrial park development. Maximum $500,000 per project Available: Other Funds A minimum of 50% of the total project costs must be privately financed through various Required: lending sources and owner equity. Job Creation/ All funded jobs must meet a wage threshold of 110% of the federal poverty level Wages: for a family of four, which, as of February 24, 2012 is $12.19/hour. Furthermore, each job must pay, at a minimum, cash wage of$10.25 per hour in non-metro areas of Minnesota (the balance may be Benefits) and $13.00 per hour in the seven county Twin Cities Metro area. This requirement includes benefits not mandated by law. For projects funded with Federal CDBG funds, 51% of the jobs created must benefit low and moderate income people. Project Timeline: Two years to satisfy the job goals. Loan Terms: Real estate: maximum of 20 years; machinery and equipment: maximum of 10 years. Interest Rate: Negotiated. Collateral: Negotiated. Personal or Corporate guarantees may be required. Disbursement: As costs are incurred but prorated with other sources of funding. Minnesota Investment Fund Program Nittson Roseau Lake of The Woods Marshall Koocbcbirg Pennington 2 Cook Red Lake Bellrami Lake Polk Clear water Itasca Norman a� 51.Louts Hubbard Cass Clay Becker adena Aitkin Callon W■lkm Cow Otter Tait WIn9 4 Mllla Pine Todd Lacs Morrison Nanabec Grant Douglas averse Benton 7E Stevens Pope Stearns (sank Big :s 7W Sherburne blsago Stone Swift Anoka Kandiyoni Meeker Wrigh, Wash Lac �� Hennepin Ram."'Leo Chippewa 6 E y Paris 11 McLeod Carver Yellow Methane Renville Scott Dakota Sibley Lincoln Lyon Redwood Nicollet Le Goodhue Srleur Rice Wabash, Brown Blue O 1'Alas..,a Steele Winona Pipestone Cottonwood watonwan 9 Earth Murray Dodge Olmsted Rock Nobles Jackson Martin Feribault Freeborn Mower Filltnore Houston Region Business Loan Officer Carol Pressley 7E, 10 651/259-7427 carol.pressley(a�state.m n.us Bradley Simenson 6W, 6E, 8 651/259-7428 bradley.simenson @state.mn.us Emily Johnson 1, 2, 3, 5 651/259-7450 emily.a.johnson@state.mn.us Samantha DiMaggio 9, 7W 651/259-7426 samantha.dimaggio @state.mn.us Bart Bevins 4, 11 651/259-7424 bart.bevins a(�state.mn.us MCCh IS TO BUSINESS in your C4fl7 lunity Who is MCC i1? The Metropolitan Consortium of Community Developers(MCCD)is a 49 member association committed to increasing opportunities for development of quality,community-based projects through collaborative action on public policy issues, loan fund development,public education efforts,and long-term strategic planning. Through these efforts,we have been able to demonstrate the effectiveness and efficiencies gained by a shared vision and cooperation. Our mission is to: "work collectively to build strong, stable communities by leveraging resources for the development of people and places." Our goals are to: 1)increase popular,political,business,and fmancial support for community-based housing and small business development organizations;2)create access to loan capital and technical assistance for emerging entrepreneurs;and 3)increase the effectiveness of community-based development through coordination,collaboration,and capacity building activities. MCCD's work is centered on three distinct program areas:Emerging Small Business Program,Member Convening,and Public Policy. Emerging Small BusinessProgram. Provides capital access and technical assistance for existing businesses and aspiring entrepreneurs who are unable to fully access the commercial banking system. The organization funds or participates in an average of 50 loans per year,with loan amounts of up to $100,000. Along with capital,MCCD staff provides more than 2,000 hours of direct technical assistance to entreprenuers. Technical assistance services include business plan development,loan packaging, feasibility studies,cash flow and financing projections,marketing plans,assistance with licensing and filing requirements,and development of sound financial management and tracking systems. Historically, more than 80%of MCCD's loans have been to minority borrowers. For many of our borrowers the loans provide self-employment,and unique opportunities for advancement and personal enrichment as business owners that may not be available to them as employees. Open to Business is a part of the Emerging Small Business Program. Convening:MCCD acts as a convener for our members. This is accomplished through monthly meetings of our Housing Committee,Economic Development Committee,and St.Paul Task Force. Agendas for each reflect the focus of the participating members. Meetings typically involve guest presenters on topics of relevance,strategy sessions related to common concerns,or general updating and sharing among the attendees.On at least an annual basis, staff from the City of Minneapolis' Community Planning and Economic Development(CPED),City of St.Paul's Planning and Economic Development(PED),the Minnesota Housing Finance Agency(MB FA),the Family Housing Fund,and Hennepin County among others,would be invited. Public Policy: With the combined expertise of the leading community development organizations, MCCD has become a recognized and respected voice on housing,small business development,and inner- city commercial development. Through the work of our standing committees,MCCD shapes an annual policy platform and legislative agenda that is formally adopted by the board of directors. These documents provide direction to staff as to items MCCD takes the lead on,those that we support others, and those that we monitor. Aside from the adopted positions,MCCD responds frequently to new program proposals,changes in policy or procedures,and funding changes at the local,state and federal levels. • I {-r654 MCCD is TO BUSINESS in your community What is Open to Business? MCCD's Open to Business program brings on-site business services specialists who can expand your community development staff's expertise in such areas as start-up fmancing and business plan development. We can respond to requests for business assistance when those requests are beyond the range of the services normally provided by your municipal agencies. Open to Business Technical Assistance Services in Dakota County: MCCD will provide intensive one-on-one technical assistance to small City/County business owners and aspiring entrepreneurs intending to establish,purchase, or improve a business in the City/County. Technical assistance includes,but is not limited to the following: ➢ Business plan development > Feasibility analysis Marketing > Cash flow and other financial projection development • Operational analysis • City and State licensing and regulatory assistance • Loan packaging, and other assistance in obtaining financing • Help in obtaining competent legal advice MCCD intends to hire a full time staff person once the minimum amount of contract is secured in Dakota County. This staff member will be based in Dakota and Carver County full.time. The business advisor will be available to meet clients at the various city halls of municipalities that are OTB cities or at their place of business. This staff person will be based out of donated office space either at the Dakota CDA or another facility in the area. Currently in OTB cities in Hennepin County we hold two-hour"Test Drive Your Business Idea"sessions once a month. We plan to offer this service to Dakota County municipalities. MCCD has offered technical assistance services since 2003,primarily through our staff facilitator,Rob Smolund. Rob came to MCCD from the City of Richfield Enterprise Facilitation project—a Hennepin County supported initiative. In the years since, our program has added specialists in the areas of business accounting,finance,real-estate development, and regulatory compliance. We now offer a team of professionals and former business owners who can provide real world advice to clients, and tailor that support to meet each client's specific needs. Depending on the needs of the client,that assistance can include business plan development, feasibility studies,cash flow and fmancing projections,marketing plans,licensing and filing requirements, and development and implementation of sound financial management and tracking systems. Even if the client can obtain all their financing from a bank, staff will assist them in preparing their loan request and will advocate for the client with the bank. In essence,MCCD staff members become an advisor, an advocate, and a partner for that entrepreneur to lean on. In addition,each entrepreneur can draw on the diversity of backgrounds and expertise of our team ri p, III CGD is TO BUSINESS in your community of experts, gaining the kind of support more established businesses benefit from with hired professionals and/or Boards of Directors. Open to Business Access to Capital Access to capital will be provided to qualifying businesses through MCCD's Emerging Small . Business Loan Program(see Exhibit B Small Business Loan Program Guidelines below). MCCD also provides its financing in partnership with other community lenders,banks or municipalities interested in making capital available to residents and/or businesses in their community. EXHIBIT B Small Business Loan Program Guidelines Loan Amounts: O Up to $25,000 for start-up businesses ® Larger fmancing packages for established businesses ® Designed to leverage other financing programs as well as private financing provided by the commercial banking community. Eligible Projects: O Borrowers must be a"for-profit"business. • Business must be complimentary to existing business community. 0 Borrowers must have equity injection as determined by fund management. Allowable Use of Proceeds: O Loan proceeds can be used for working capital,inventory, building and equipment and general business operations. Interest Rates: o Loan interest rate is dependent on use,term and other factors,not to exceed 10%. Loan Term Length: O Loan repayment terms will generally range from three to five years,but may be substantially longer for major asset financing such as commercial property. Fees and Charges: O Borrowers are responsible for paying all customary legal and other loan closing costs. i71 oN v v3xaw s<rtF MCCD is TO BUSINESS in your community Open to Business Loan Products MCCD manages a multi-million dollar loan pool consisting of a mix of State,Federal,Bank and private capital sources. We are able to structure financing packages for a.variety of business purposes that are flexible and designed to either enhance a business's opportunities to leverage private financing, or act as a bridge to future financing be traditional capital markets. Below are some examples of the financing packages available to Open to Business clients: ® Loan Packaging/Facilitation MCCD staff can assist potential borrowers with the preparation of business plans, cash flow and other financial projections and loan application materials. Our staff can assist entrepreneurs in identifying borrowing needs and accessing community lending programs that provide favorable terms and conditions for small business borrowers. We work with our clients to help them find the financing that best meets their unique needs. ® Micro Loans Direct loans from MCCD for a variety of business purposes,including inventory, working capital, asset and equipment purchases,and start-up costs.Typical loan terms of 3-5 years, loan sizes up to$25,000 for retail/service businesses, or$50,000 for manufacturing businesses. This program is targeted to start-up and early stage businesses that cannot secure financing from traditional commercial lenders. © Four Percent Loan Program MCCD loans in partnership with private lenders for physical improvements and hard asset/equipment purchases. MCCD can provide financing of up to $40,000 at an interest rate of 4%provided that its funds are matched by an equal or greater amount of bank funds. The 4%rate is available for bank partnership loans provided that the term on the MCCD loan does not exceed five years. © Real Estate Participation Loans MCCD loans in partnership with private lenders to provide gap financing for real estate acquisition projects—including projects financed through the SBA 504 program. MCCD matches the bank's rate. MCCD also matches the bank's term provided that the term does not exceed 10 years. ® Real Estate Acquisition Financing MCCD,in partnership with private lenders,provides permanent term financing for commercial real estate acquisition—up to 90% of the property's appraised value.MCCD , Li #i 4 t �r�r � t CA`. MCCD TO BUSINESS in your community will provide up to 40%of the appraised value,with the bank providing 50%and holding first secured position. MCCD will match the bank's rate with terms up to 10 years (though amortizations may be longer). Transactional Financing MCCD provides short term loans for businesses whose cash flow cycle inhibits them from making regular monthly loan payments. Transactional loans are often used by construction contractors who have received or about to receive a construction contract with a community agency. MCCD can provide up front financing to cover the cost of labor and material associated with the contract. When the work on the contract is completed,the contracting agency issues a two-party check to cover the completed work, payable to MCCD and to the contractor. Larger loans are also available for businesses with performance bonds and escrow payment arrangements. Loan Origination and Servicing MCCD seeks to integrate its financing products with other available resources in its service areas. To facilitate that integration, MCCD may be able to originate,package,underwrite and potentially service loan funds or programs offered by the County,.individual Cities,or other Development authorities. Partnerships in other Open to Business communities include management of community facade/fix-up grants,packaging of City-controlled loan products, and full underwriting and servicing of Commercial loans with City funds"purchasing"a portion of the total financing. Where appropriate, MCCD and the municipal lending authority shall enact a separate agreement to govern the rights and duties of each party to such a partnership. • rri . N. a' MCCD is TO BUSINESS in your community Dakota County Fees: Based on MCCD's current work load and resources,we would have to have a minimum of$100,000 in annual fees to begin work in Dakota County.The individual city pricing is listed below. To avoid confusion on what city is an Open to Business city,we would recommend covering all of Dakota County for$150,000 annually. _ __ . . ... ' Whole population ! employment 'county OTB (2010) (2011) ;Annual Fee Dakota County 400,000 : 170,582 I $150,000.00 Sort by population;largest to smallest Open To population employment ;Business (2010) (2011) ;Annual Fee ;Eagan 64,206 49,032 $ 15,000.00 ;Burnsville " 60,306 31,656 , $ 15,000.00 Lakeville 55,954 14,522 ' $ 15,000.00 Apple Valley 49,084 . 14,350 $ 15,000.00 IGH 33,880 ' 9,647 ; $ 12,500.00 Hastings 22,172 . 8,303 $ 10,000.00 Rosemount y 21,874 ' 6,980 ; $ 10,000.00 !Farmington 21,086 4,461 I $ 10,000.00 ;SSP 20,160 • 8,112 ; $ 10,000.00 ' • WSP 19,540 • 7,683 ! $ 10,000.00 I MH ! 11,071 ; 11,528 ' $ 7,500.00 City Total 379,333 166,274 $130,000.00 Marketing Open to Business: o Inform all city staff of OTB program, especially staff that has contact with prospective entrepreneurs and existing businesses. Have OTB staff make short presentation at city staff meetings o Feature OTB on website, especially advertise monthly walk in counseling sessions o Include article in city newsletter o Notices in utility bills o Promote program through local chamber of commerce o Coordinate meetings with key community bankers and OTB staff o Press releases to community newspapers on businesses helped by OTB •