HomeMy WebLinkAbout4.A. Public Hearing on the Consideration of Minnesota Investment Fund Application for Datacard Corp. Res. No. 2014-5 General Business 4• A.
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TO: Economic Development Authority
FROM: Samantha DiMaggio,Economic Development Coordinator
DATE: 10/07/2014
SUBJECT: Public Hearing on the consideration of Minnesota Investment Fund Application for Datacard
Corporation-Res.No. 2014-5
Background
Minnesota Investment Funds(MIF)are awarded to local units of government who provide loans to assist expanding
businesses.Cities,counties,townships and recognized Indian tribal governments are eligible for this fund.All
projects must meet minimum criteria for private investment,number of jobs created or retained,and wages paid.
There is a maximum of$500,000 per project for projects of this size/number of jobs.At least 50 percent of total
project costs must be privately fmanced through owner equity and other lending sources(most applications selected
for funding have at least 70 percent private financing).Terms are for a maximum of 20 years for real estate and a
maximum of 10 years for machinery and equipment. Interest rates are negotiated.
On July 29,2013,Datacard Corporation was awarded an 11 year Tax Abatement in the amount of$334,869 to
assist in the purchase and rehabilitation of a 400,000 sq foot corporate office building in Shakopee,MN. Due to the
size of this expansion and the extensive remodeling of this facility,Datacard Corporations also requesting$500,000
in assistance from the Minnestoa Deparment of Employment and Economic Development's Minnesota Investment
Fund. The MIF funds will be used to purchase equipment for the facility. The total costs of the equipment and
renovations are approximately$13,000,000. The remaining$12,500,000 will be financed through owner equity.
Upon completion of this facility,Datacard Corporation will relocated all of its 680 permanent full-time Minnetonka
employees and operations to the newly renovated facility.Additionally,Datacard will relocated its MultiWeb
operations and employees, as well as an external third-party warehousing operation to the new location. As a result
of their expansion,Datacard Corporation also plan on adding between 100-125 new full time equivalent positions at
this facility within the next two years.Datacard Corporation hopes to move into their new location in early 2015.
Action Sought
The EDA should hold a Public Hearing on the consideration of a Minnesota Investment Fund application on behalf
of Datacard Corporation.
Following the Public Hearing, if the EDA concurs,it should,by motion,approve the following Resolution:
Resolution No.2014-5,A Resolution Regarding the Authorization and Approval for a Minnesota Investment Fund
Application,Grant Agreement and Forgivable Loan in Connection with Datacard Corporation or its Affiliates.
Attachments: Res.No.2014-5
ECONOMIC DEVELOPMENT AUTHORITY FOR THE
CITY OF SHAKOPEE,MINNESOTA
RESOLUTION NO.2014-5
RESOLUTION REGUARDING THE AUTHORIZATION AND APPROVAL FOR A MINNESOTA
INVESTMENT FUND APPLICATION,GRANT AGREEMENT AND FORGIVEABLE LOAN IN
CONNECTION WITH DATACARD CORPORATION OR ITS AFFILIATES.
WHEREAS,DataCard Corporation,a Delaware corporation(the "Borrower"),has constructed an
expansion to an approximately 370,000 square foot building previously used as manufacturing space and
converted it for use as its corporate headquarters (the "Facility") on real property located in the City of
Shakopee,Minnesota(the"City");and
WHEREAS, the Borrower has requested financial assistance to help purchase equipment needed
for the operation of its corporate headquarters;and
WHEREAS, pursuant to a resolution adopted on October 7, 2014, the Board of Commissioners of
the Economic Development Authority for the City of Shakopee, Minnesota (the "Board") approved the
submission of an application for a grant from the Minnesota Investment Fund Program administered by the
Minnesota Department of Employment and Economic Development("DEED");and
WHEREAS, the Economic Development Authority for the City of Shakopee, Minnesota (the
"Authority")will enter into the form of a Grant Agreement with DEED,to obtain grant funds in the amount
of$500,000 and loan such grant funds to the Borrower for the purpose of purchasing equipment for the
Facility;and
WHEREAS,the Board has received and reviewed an Agreement for Loan of Minnesota Investment
Fund—Forgivable Loan(the"Loan Agreement"),between the Authority and the Borrower,providing for the
loan of the grant funds in the amount of$500,000 to the Borrower(the"Loan"),which agreement includes a
"business subsidy agreement" as defined in Minnesota Statutes, Sections 166.1.993 to 1161995, as amended
(the"Business Subsidy Act"); and
WHEREAS, it is proposed that the Loan be considered forgivable provided that the Borrower
complies with certain requirements of the business subsidy agreement contained in the Loan Agreement;and
WHEREAS,to evidence the repayment obligations of the Borrower under the Loan Agreement,the
Borrower will execute and deliver to the Authority a Promissory Note (the "Note"), a Guaranty (the
"Guaranty")and a Security Agreement(the"Security Agreement");and
WHEREAS, the Board has had the opportunity to review the Loan Agreement, including the
business subsidy agreement contained therein,the Note,the Guaranty and the Security Agreement;and
WHEREAS, on the date hereof, the Authority, conducted a duly noticed public hearing as required
by Section 1161994, subdivision 5 of the Business Subsidy Act on the proposed Loan to be made to the
Borrower pursuant to the Loan Agreement.
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NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic Development
Authority for the City of Shakopee,Minnesota,that:
1. The Security Agreement, the Note, the Guaranty and the Loan Agreement, including the
business subsidy agreement contained therein (collectively, the "Loan Documents") are
approved. A Letter of Credit may be substituted for the Guaranty. The President and the
Executive Director are authorized and directed to sign the Loan Documents and any other
documents or certificates necessary to carry out the transactions described in the Loan
Documents.
2. The Loan Documents are approved in substantially the form on file in City Hall, subject
to modifications that do not alter the substance of the transaction and are approved by the
President and the Executive Director; provided that execution of the document will be
conclusive evidence of their approval.
Sworn and Executed Under My Hand this 7 day of October,2014
Matt Lehman,President
Mark McNeill,Executive Director
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