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Harmony EDA recommends two small-business loans totaling $60,000, directs lower fixed rate
Summary
The Harmony EDA recommended City Council approval of a $25,000 loan to Greyrock Properties LLC and a $35,000 loan to SRH LLC, and asked that both be approved with a 6.75% fixed interest rate instead of the program’s current 8.5% rate; the board also asked staff to consider updating loan guidelines.
The Harmony Economic Development Authority recommended City Council approval of two loans totaling $60,000 at its Aug. 1 meeting, and asked that both be set at a 6.75% fixed interest rate rather than the program’s current 8.5%.
EDA staff member Chris Giesen reviewed a $25,000 request from Greyrock Properties LLC to purchase and renovate a commercial building at 590 Main Ave North; owners Spencer Hovey and Dan Root were present. The loan committee recommended approval. The board voted to recommend council approval with a 6.75% fixed rate (motion by Steve Donney, second by Stuart Morem). The motion carried 4-0-1, with Greg Schieber abstaining because he was not present for the discussion.
Giesen also reviewed a $35,000 loan request for SRH LLC to fund roughly half the cost of replacing the roof on a commercial building at 65 Main Ave North. The project would be paid in part with owner cash and a Small City Block Grant; the loan would also recast an existing EDA loan so the owner could use an approximately $34,000 Small City Block Grant for the roof work. The loan committee recommended approval and the board approved recommending council authorization with a 6.75% fixed rate (motion by Michael Himlie, second by Stuart Morem); the motion carried unanimously.
Board members said the standard program rate, tied to The Wall Street Journal prime, is currently 8.5% and the loan committee felt that level was too high to support local businesses. The board reached consensus to seek a lower rate for the two applications on the agenda and directed staff to consider revising the loan fund guidelines regarding general interest-rate policy at a future meeting.
The board noted that standard loan terms would apply and that loan documents and final terms would be subject to City Council approval. Chris Giesen said the loan schedule was not yet available but he would forward it when received.
Next steps: the EDA will forward the loan recommendations and their preferred 6.75% fixed-rate recommendation to the City Council for final action.
