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Transmittal - 5/8/2023DEP ARTMENT of ECONOMIC DEVELOPMENT ERIN MENDENHALL MAYOR LORENA RIFFO-JENSON DIRECTOR CIT Y COUNCIL TRANSMITTAL _______________________ Date Received: ___________ Lisa Shaffer, Chief Administrative Officer Date sent to Council: ___________ __________________________________________________________________ TO: Salt Lake City Council DATE: May 4, 2023 Darin Mano , Chair FRO M: Lorena Riffo-Jenson, Director, Department of Economic Development SU BJECT: Economic Development Revolving Loan Fund (EDLF) – Salt Lake Sandwich Company, LLC. STAFF CONTACTS: Roberta Reichgelt, Business Development Director, Roberta.reichgelt@slcgov.com Will Wright, Project Manager, William.wright@slcgov.com DO CUMENT TYPE: Loan Approval RECOMMENDATION : The EDLF Loan Committee recommends approval of a $100,000 loan to Salt Lake Sandwich Company, LLC . BU DGET IMPACT: $100,000 from the Economic Development Loan Fund BA CKGROUND/DISCUSSION: On April 27, 2023, a loan request from Salt Lake Sandwich Company, LLC, for $100,000 was presented to the EDLF Loan Committee for review and discussion. Salt Lake Sandwich Company is a Poplar Grove based breakfast focused food truck. Basic Loan request Business Name: Salt Lake Sandwich Company Address: 1408 W Arapaho Ave Loan Amount Requested: $100,000 Loan Term: 7 years Interest Rate: 8.25% Use of Funds: Equipment, Working Capital Loan Type: Start up. Lisa Shaffer (May 8, 2023 12:09 MDT) 05/08/2023 05/08/2023 Reasoning behind staff recommendation Applicants of The Economic Development Loan Fund (EDLF) go through a thorough application process consisting of a pre-screening, underwriting analysis and economic impact statement. Only after the loan applicant goes through these processes, then the loan is recommended to be reviewed by the Loan Committee members. Upon the thorough review of the Loan Committee members then a recommendation is made before the loan is transmitted to the Mayor for Council to receive the recommendation for final approval. Because the Loan Committee review process must adhere to the Open Meetings Act, DED’s staff has worked closely with the City Attorney’s Office to ensure that applicants’ information is protected and at the same time the public process is followed. In additio n, the EDLF loans must meet the following goals of the Economic Development Loan Fund as stated in the EDLF program guidelines. This loan meets the EDLF program guidelines in the following areas. • Increase employment opportunities, • Stimulate business development and expansion, • Promote economic development, • Enhance neighborhood vitality, and • Boost commercial enterprise, • While maintaining the corpus of the EDLF in a sufficient manner to perpetuate the goals of the program (collectively, “Goals”). This loan will assist in the creation of 3.5 new jobs in the next year and retention of 0 current jobs. This loan was recommended by the EDLF Committee to the City Council for approval. EDLF Loan Balances 1. As reported from The Finance Department on April 17, 2023, the EDLF available fund balance is: $8,706,947. 2. The amount of outstanding loans totals as of March 31, 2023 is: $3,761,588.80 EDLF Loan Committee There are a total of nine (9) EDLF Committee members. City Employees: 1. Community and Neighborhoods Finance 2. Mayor’s Office 3. Employee at large 4. Housing Stability 5. Economic Development Community Volunteers: 6. Business Advisory Board (BAB) member 7. Banker 8. Community lender 9. Business mentor Attachments: Terms Sheet and Resolution SALT LAKE CITY ORDINANCE No. _____ of 2023 (Ordinance approving a $10 0,000 loan for Salt Lake Sandwich Company, In c., at 1 408 W. Arapahoe Ave. from the Economic Development Loan Fund) WHEREAS, Salt Lake City Corporation’s (“City”) Economic Development Loan Fund (“EDLF) is a program to stimulate local business development, encourage private investment, enhance neighborhood vitality, and boost commercial enterprise in Salt Lake City. WHEREAS, th e EDLF is administered by the Department of Economic Development (“DED”) and loan applications are first prescreened by DED staff, and then reviewed by the EDLF Loan Committee. WHEREAS, the EDLF Loan Committee and DED staff recommend the approval of the attached loan term sheet for a $100,000 loan to Salt Lake Sandwich Company, Inc., a local business located at 1408 West Arapahoe Avenue. NOW, THEREFORE, b e it ordained b y th e City Co uncil of Salt Lake City, Utah, th at: SECTION 1 . Loan Approval. The City Council approves the loan outlined in the Term Sheet attached h ereto, subject to revisions th at do n ot materially a ffec t the rights and obligations of the City hereunder. The City Council authorizes the Mayor to negotiate and execute the loan agreement and any other relevant documents consistent with the Term Sheet, and incorporating such other terms and agreements as recommended by the City Attorney’s of fice. SECTION 2 . Effective Date. This o rdinance shall become e ffective o n th e d ate o f its first publication. Passed by the City Council of Salt Lake City, Utah, this ______ day of _____________________, 2023. Darin Mano, Council Chair ATTEST AND COUNTERSIGN: ______________________________ CITY RECORDER Transmitted to Mayor on _______________________. Mayor's Action: _______Approved. _______Vetoed. ______________________________ MAYOR ______________________________ CITY RECORDER (SEAL) Bill No. ________ of 2023. Published: ______________. APPROVED AS TO FORM Salt Lake City Attorney’s Office Date: Sara Montoya, City Attorney April 27, 2023 LOAN TERM SHEET Applicant : Salt Lake Sandwich Company, LLC Address : 1408 W Arapahoe Ave. Proposed Loan Terms Loan Amount: $100,000 Loan Terms: 7 Years Interest Rate Calculation Prime Interest Rate: 6.25% (at the time of application on October 25, 2022 EDLF Charge: 4% Less Discount: 1% for each •Socially and Economically Disadvantaged Individual (SEDI) •Priority area: Poplar Grove Interest Rate: 8.25% Use of Funds : Food Truck, Equipment, Working Capital Business Type: Start up. Collateral and Guarantees: Real Estate, Equipment Personal Guarantees: Michelle Drawn Conditions for Closing •Salt Lake City Business License, Commissary Kitchen Agreement in Poplar Grove, or other priority area. •Obtain all City approvals, execute all loan documents as deemed necessary by City legal counsel a nd DED staff, such other terms as recommended by City legal counsel and DED staff.