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HomeMy WebLinkAboutTargeted Commercial Assistance Program Policy CITY OF PRIOR LAKE, MINNESOTA TARGETED COMMERCIAL ASSISTANCE PROGRAM POLICY Adopted May 11, 2015 PURPOSE This Targeted Commercial Assistance (TCA) Program has been designed to provide financial assistance related to commercial businesses moving from the Gateway Center building at 5101-5137 Gateway Street SE to an alternate commercial property within the city limits of the City of Prior Lake, Minnesota. DEFINITIONS Terms used in this Policy are intended to have the same meaning as used in the MN Business Subsidy Law. For the purposes of this document,the following definitions apply: Agency-Owner Contract. The "Agency-Owner Contract" is an agreement by and between the City of Prior Lake (Agency)and Recepient(Owner)which jointly identifies for the Agency and the Owner the improvements to the Owner's business to be accomplished with TCA Program funds and the Owner's private financial commitment. Benefit Date. "Benefit Date" means the date that the Recipient and City enter into the Agency-Owner Contract. City. "City" includes the Prior Lake City Council and/or Prior Lake Economic Development Authority. Commitment Period. "Commitment Period" refers to a three year period, beginning on the Benefit Date,which the Recipient commits to keeping their business located in the City of Prior Lake. Eligible Applicant."Eligible Applicant"is a business owner,who as of the date of this policy adoption,was located in the Gateway Center building at 5101-5137 Gateway Street SE. Eligible Project Costs. "Eligible Project Costs" means necessary reestablishment costs which are required due to the moving of the business from the Gateway Center building. Personal Guarantee. "Personal Guarantee" is an agreement whereby Recipient unconditionally personally guarantees the full and faithful performance of all terms and conditions of the Agency-Owner Contract relating to reimbursement of the TCA Program funds in the event Recepient business moves outside of the City of Prior Lake prior to expiration of the Commitment Period. Recipient."Recipient" means any business which receives a TCA Program loan. Rehabilitation Advisor. For the purposes of the TCA Program, the "Rehabilitation Advisor" shall be the City of Prior Lake Community Development Specialist. TARGETED COMMERCIAL ASSISTANCE DEFERRED LOAN FUND GUIDELINES ➢ TCA Program funds cover 50% of Eligible Project Costs up to a maximum loan amount of$20,000 per Recipient. ➢ TCA Program funds will be provided as a 0.0%interest loan with deferred payments for a period of three years. City of Prior Lake Targeted Commercial Assistance Program Policy 1 ➢ Recipient will be required to enter into an Agency-Owner Contract, and TCA Program funds will be secured with a Personal Guarantee. ➢ The Agency-Owner Contract will include a due-on-sale or transfer clause, which means all unpaid principal shall become due and payable prior to any Recipient business relocation, sale or transfer of ownership of the Recipient business during the three-year commitment term unless written consent is provided by the City. ➢ If the Recipient remains in Prior Lake for the entire three-year commitment period, the TCA Program loan is forgiven;33.3%of the loan will be forgiven upon the Recipient remaining in Prior Lake for entire year one,66.6%for entire year two, and 100%at the end of entire year three. > All remaining project costs, in excess of the approved Eligible Project Costs, are to be financed through sources other than the City,such as owner cash contributions or conventional financing. ➢ Only Eligible Project Costs which have been approved by the Rehabilitation Advisor prior to the commencement of construction activities,will be eligible for reimbursement. ➢ Recipient must pay the matching fund requirement before TCA Program funds are provided (i.e., $40,000 must be spent first by the Recipient to receive a $20,000 loan from the City). ➢ Recipient must pay all Eligible Project Costs and provide proof of payment to the Rehabilitation Advisor. Following verification of payment, City will reimburse Recipient for approved Eligible Project Costs. > Program participation is based on first come,first served. ➢ The reestablishment work must be completed within 90 days of the Benefit Date unless City provides a written extension. ➢ Inspectors from City will conduct an inspection to verify the Eligible Project Costs have been completed. ➢ If the Recipient completes their own work,the TCA Program funds will cover the cost of materials only. ➢ Eligible Project Costs must be located in a commercial property which is located in a Commercial Use District as designated on the Official City of Prior Lake Zoning Map, or as may further deemed to be a legal nonconforming commercial space. ELIGIBLE PROJECT COSTS All Eligible Project Costs must be approved by the Rehabilitation Advisor prior to construction and include but are not limited to: ➢ Improvements which are physically attached to the property and are considered a permanent improvement. ➢ Alteration, renovation,or repairs which correct defects and deficiencies which directly affect the safety, habitability, energy consumption, or esthetics of the property, correction of code violation, energy related improvements, or accessibility improvements. ➢ Purchase of,or costs related to moving of equipment,which in the opinion of the Rehabilitation Advisor, are necessary for Recipient's use of the premises. ➢ Improvements, which in the opinion of the Rehabilitation Advisor, are necessary for Recipient's use of the premises. ➢ Engineering and Architectural design fees. ➢ Sewer Access Charge and Water Access Charge fees. > City of Prior Lake building permit fees. INELIGIBLE PROJECT COSTS Ineligible project costs include but are not limited to: > Improvements,which in the opinion of the Rehabilitation Advisor,are not necessary for Recipient's use of the premises. > Lease payments. City of Prior Lake Targeted Commercial Assistance Program Policy 2 ➢ Operating expenses. ➢ Property tax or Common Area Maintenance costs. ➢ Costs associated with moving inventory, materials and supplies from the Gateway Center building to another location, with the exception of costs associated with moving equipment as identified under Eligible Project Costs. FUNDING SOURCE The City has dedicated funding from the TIF 1-1 account for this TCA Program. Eligible Applicants may apply for funding until August 1,2015,at which point the City will no longer accept applications for TCA Program funding. SUBSIDY APPLICATION PROCESS AND PROCEDURE ➢ An application shall be made on forms for the particular form of assistance provided by the City of Prior Lake Community& Economic Development Director,or designee. ➢ Following a review by appropriate City staff, the application shall be referred to the Economic Development Authority for review. ➢ The application shall request information including, but not limited to: a detailed description of the project;a preliminary site plan;the amount of business subsidy requested and verifiable funding sources and uses. ➢ The City must approve the program application for funding to be provided. City of Prior Lake Targeted Commercial Assistance Program Policy 3