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Consider Business Development Loan, Steinwall Properties, LLC, 11225 Xeon St.
Matt Brown, Economic Development Coordinator
The HRA is asked to consider a loan agreement with Steinwall Properties, LLC for improvements at an industrial property located at 11225 Xeon Street.
Steinwall, Inc. is a plastic injection molding manufacturer that has been located in Coon Rapids since 1994. While its main manufacturing facility is located at 1759 116th Avenue, Steinwall also operates an approximately 70,000 square foot warehouse in Brooklyn Park. Because it has outgrown the Brooklyn Park facility, the business is purchasing a 145,000 square foot industrial building at 11225 Xeon Street in Coon Rapids. This building, a former Anheuser-Busch distribution facility, will allow for future growth and reduce transportation costs between facilties.
The HRA received an application from Steinwall Properties, LLC and Steinwall, Inc. for improvements associated with the purchase of the building. Funded by an allocation of the HRA account and repayments of Minnesota Investment Fund loans, the HRA created the loan fund in 2013 as a tool to facilitate development projects meeting City goals. It is proposed that the HRA provide Steinwall with a $200,000 loan with a 5.5% interest rate and a 20-year amortization over a 10-year term. The HRA loan would fund racking, equipment, mechanical upgrades, and minor building renovations. Other sources of financing for the $8.6 million purchase and improvement project include a bank loan, SBA loan, and owner equity. Staff feels that this project meets the HRA's loan guidelines and is a good candidate for HRA assistance. Staff from Central Minnesota Development Company, which will service the HRA loan, reviewed the loan application and recommends approval of the credit request. A loan agreement, which establishes the terms, collateral, and job creation requirements, will be distributed at Tuesday's meeting. Because this financial assistance package is a market-rate loan generally available to other similar businesses, staff has determined that it is exempt from the Minnesota Business Subsidy Act and does not require a public hearing.
Staff recommends that the HRA:
Approve a $200,000 business development loan to Steinwall Properties, LLC and approve the loan agreement substantially in the form provided.
Authorize the Chair and Secretary to execute the loan agreement and authorize the Executive Director to execute additional loan documents as necessary for closing.
Business Development Loan Agreement 11225 Xeon St
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