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HomeMy WebLinkAbout4.A. Public Hearing on the Consideration of Minnesota Investment Fund Application for Datacard Corp. Res. No. 2014-5 General Business 4• A. si I \KOl'EE 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. 450122v1 JAE SH155-317 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 450122v1 JAE SH155-317 2