HomeMy WebLinkAbout05-04 - ADMIN Resolution - Economic Development Authority - 2005/04/04ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 05-04
RESOLUTION APPROVING PARTICIPATION IN
TWIN CPI'IES COMMUNITY CAPITAL FUND
(TCCCF)
BE IT RESOLVED By the Board of Commissioners (`Board") of the St. Louis Park
Economic Development Authority ("Authority") as follows:
Section 1. Recitals.
1.01. The Authority is an economic development authority established pursuant to
Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and has all the powers under the
EDA Act as well as all the powers of a housing and redevelopment authority under Minnesota
Statutes, Sections 469.001 to 469.047 ("HRA Act').
1.02. Under Minnesota Statutes, Section 469.192, the Authority also has the authority to
make loans for any purpose the Authority is authorized to carry out under the EDA Act and HRA
Act.
1.03. The Authority currently operates two revolving loan programs: the commercial
rehabilitation loan (CRL Program) and the small business loan guaranty program (SBLG Program)
(collectively, the "Small Business Loan Programs"). The CRL Program provides low interest
financial assistance to small retail, service and light manufacturing businesses for building and
property renovations within designated areas of St. Louis Park. The SBLG Program works with the
local financial community providing guarantees on loans which lenders would otherwise be unable
to finance, so that the loan absorbs a portion of the risk associated with underwriting concerns
relating to a small or newly established business.
1.04. Through recent experience, staff of the Authority has concerns about the risks
inherent in small business lending, as well as the administrative costs inherent in making small
dollar value loans, and has investigated programs which would assist the Authority and the City in
continuing to meet the financing needs of small businesses through an alternative financing
program.
1.05. The Twin Cities Community Capital Fund ("TCCCF") is a newly formed nonprofit
economic development loan pool created by The Northland Institute. TCCCF offers customized
flexible, gap financing to fit small business needs, as well as providing long term, subordinated
fixed rate loans in its participating Twin Cities communities and partnerships with local banks and
other commercial lenders. This loan pool is revolving and self-sustaining since it sells its pre -
approved loans to the secondary market which reduces the risks to TCCCF and its members.
TCCCF is modeled after the "Minnesota Community Capital Fund" which is a loan program for
Greater Minnesota.
1.06. Under the TCCCF program, the Authority provides funds to TCCCF, which in tum
makes loans for the purposes for which the Authority may make loans under the EDA and HRA
Act, similar to loans currently made by the Authority under its Small Business Loan Programs.
EDA Resolution No. 05-04 -2-
1.07. The Authority has before it a staff recommendation for the Authority to become a
member of the TCCCF at the $50,000 level, which is the minimum loan amount for participation in
TCCCF. It is proposed that this $50,000 deposit be paid out of the Authority's development fund,
which funds will be placed in the TCCCF loan fund escrow account, subject to the condition that
the funds remain the property of the Authority and may only be used to fund TCCCF loans, with
10% of the Authority's escrow account, $5,000, be in the form of a loan to the TCCCF for startup
working capital, and consistent with the TCCCF Membership Disclosure Statement and
Participation Agreement.
Section 2. Authority Approval; Further Proceedings.
2.01. The participation of the Authority in the TCCCF, under the terms offered in the
TCCCF Membership Disclosure Statement, is in all respects approved. Staff is further directed to
suspend the Small Business Loan Programs for the three year TCCCF trial period
2.02. The President and Executive Director are hereby authorized to execute on behalf of
the Authority the TCCCF Loan Fund Escrow Agreement and TCCCF Participation Agreement,
subject to modifications that do not alter the substance of the transaction and that are approved by
the President and the Executive Director, provided that execution of the documents by such officials
shall be conclusive evidence of approval. The President and Executive Director are further
authorized to execute any other documents reasonably requiring execution by the Authority in
connection with the TCCCF program, and to carry out, on behalf of the Authority its obligations as
a member of the TCCCF.
Approved by the Board of Commissioners of the St. Louis Park Economic Development
ty this 4th day of April, 2005.
Rev4weq for Administration Adopted by the Economic Development Authority
April 4, 2005
Executive Dire or Pr��
Attest:
S cretary
WN -2609850
SA285-04