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Transmittal - 11/22/2023 REDEVELOPMENT AGENCY of SALT LAKE CITY SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245 MAYOR ERIN MENDENHALL Executive Director DANNY WALZ Director STAFF MEMO DATE: November 22, 2023 PREPARED BY: Austin Taylor, Project Manager RE: RDA Loan: The Front HQ REQUESTED ACTION: Consider a $2m RDA loan application from Rocky Ventures for The Front HQ in the State Street Project Area POLICY ITEM: RDA Loan BUDGET IMPACTS: $2m from State Street Project Area funds EXECUTIVE SUMMARY/BACKGROUND The Front, located at 1470 S 400 W, is a climbing gym located within the Redevelopment Agency’s State Street project area. The Front is working to expand its gym by remodeling the existing structure and adaptively reusing an adjacent vacant warehouse, combining two buildings into one single facility that will offer approximately 70,000 square feet of space. This expansion project will add climbing walls, fitness studios, bathrooms and showers, a staff break room, storage space, and various mechanical, electrical, and fire suppression systems. The project has already begun construction; the owner is paying for the project with the business’s cash reserves. The RDA loan would allow the owner to complete the project quicker and begin offering expanded services sooner. The Front’s owner, Rocky Ventures (“Applicant”), is requesting a $2,000,000 RDA loan (40% loan to hard cost) for Phases I-III of its four-phase expansion project. Rocky Ventures is proposing a 3-year term with a 20-year amortization schedule, which fits within the RDA loan policy. The project would require two waivers from the RDA Board for aspects of the project that do not follow RDA policy: one waiver from the Sustainable Development Policy that prohibits on-site natural gas combustion, and a second waiver from the Revolving Loan Fund Policy that requires projects receiving primary loans to meet six or more Public Benefit Criteria. RDA staff believes that the project meets five of the six required Public Benefit Criteria. APPLICANT INFORMATION The Front is a climbing gym owned by Rocky Ventures, an S Corp 100% owned by Dustin Buckthal. The Front was founded in 1989 in Sandy, Utah and—after being acquired by a new owner—moved to its current location in 1998. Current owner Dustin Buckthal purchased The Front in 2005. In 2016, The Front built its current building, which features 60-foot climbing walls, bouldering walls, fitness rooms, saunas, a climbing retail shop, restaurant, and more. The Front now operates facilities in three locations: Salt Lake City (opened at its current location in 1998), Ogden (opened in 2010), and Millcreek (opened in 2020). At its Salt Lake City location, The Front operates a climbing gym, small climbing-focused retail store, café, fitness studios, weightlifting area, and ongoing classes, and it hosts competitions and community events throughout the year. Rocky Ventures received a $350,000 EDLF loan from Salt Lake City Economic Development for its 2016 new building project and is current on its debt service obligations. FUNDING REQUEST The Applicant is requesting a $2 million loan with a 3-year term and 20-year amortization schedule through the RDA Loan Program to pay for Phases I-III of its 4-phase expansion project. The Front explains its four-phase expansion project as follows: • Phase 1, started March 2023, estimated completion November 2023: additional entry to facility, addition of fitness class studios, gender-neutral bathrooms and showers, and temporary climbing training areas, replacement of mechanical and electrical systems, addition of large windows. • Phase 2, November 2023 to February 2024: removal of buildouts and addition of climbing walls, addition of large windows, connection of 1420 and 1450 [400 West] buildings, replacement of mechanical and electricals, addition of fire suppression system, addition of staff break room. • Phase 3, March 2024 to May 2024: addition of fire suppression system, replacement of electrical and mechanical system, connection of direct courtyard access, addition of gender- neutral bathrooms. • (NOT IN SCOPE OF RDA LOAN) Phase 4, June 2024 to June 2025: raising building to 60ft, adding additional space for weights and cardio equipment, addition of yoga facilities, addition of World Cup and Olympic style route and bouldering walls for athlete training and hosting international competitions, replacement of mechanical and electrical systems. Primary Financing The Applicant is requesting primary financing through the RDA because bank loans have been difficult to get due to recent nationwide credit tightening, especially in “opportunistic” investment types. Banks are also wanting to refinance the entire four-building property into one large permanent loan. Doing so would drastically increase The Front’s debt service payments due to recent interest rate hikes. The Applicant has provided documentation verifying that the project’s ability to secure traditional financing is limited. RDA policy allows the RDA to provide primary financing if the project includes at least six of the following Public Benefit Criteria: Sustainability, Public Amenities, Adaptive Reuse, Historic Preservation, Permanent Job Creation/Retention, Architecture/Urban Design, Transit Alternatives, Economic Impact, and Affordable Housing. RDA staff believes this project meets five of the Public Benefit Criteria (Public Amenities, Adaptive Reuse, Permanent Job Creation, Transit Alternatives, and Economic Impact), and that it is close to meeting another two criteria but cannot because of factors specific to the project (as discussed in Section V below). Loan Terms Pursuant to RDA Loan Program Policy (“Policy”), the project is eligible for a 3-year term with a 20- year amortization period. Based on the Policy, the project qualifies for a 5.10% interest rate, calculated by subtracting 50 basis points for each qualifying Public Benefit from the RDA Loan Program Base Rate as follows: RDA Loan Program Base Rate (U.S. Treasury Yield plus 3%) 7.60% Public Benefit Interest Rate Reduction1: • Public Amenities2 • Adaptive Reuse3 • Permanent Job Creation4 • Transit Alternatives5 • Economic Impact6 -0.5% -0.5% -0.5% -0.5% -0.5% Final Interest Rate7 5.10% 1To be eligible for interest rate reductions, the project will be required to meet the criteria outlined in Section V. Maximum interest rate reduction of 250 basis points. 2Project will provide significant public art amenity and meet RDA public art policy by spending 1.5% of RDA loan value on art 3Project will repurpose existing warehouse buildings 4Expansion will create 40 permanent jobs 5Project will provide showers, lockers, bike storage, and a dedicated car-sharing parking space 6Project will prioritize space for locally-owned business 7The interest rate provided is an estimate. The final interest rate will be based on the 3- year U.S. Treasury Yield Curve Rate, as determined by the term of the loan, at loan closing. Refer to Attachment A: Loan Term Sheet for additional detail on proposed loan terms and conditions. FINANCIAL OVERVIEW Sources RDA Loan $2,000,000 40% Equity Contribution $3,000,000 60% Total Sources $5,000,000 100% Uses Hard and Soft Construction Costs $5,000,000 100% Total Uses $5,000,000 100% POLICY ALIGNMENT: RDA LOAN PROGRAM Waivers This loan request mostly aligns with RDA Loan Program Policy (“Program”), as adopted by the RDA Board of Directors; however, it will require waivers for two exceptions: • Exception from RDA Sustainable Development Policy. This policy requires (1) projects that receive more than $200,000 in RDA funding to achieve an Energy Use Intensity value corresponding with a “Designed to Earn the ENERGY STAR” score of 90 or higher, and (2) projects that receive more than $900,000 in RDA funding to operate solely on electric power—not fossil fuels such as natural gas. An exception from these threshold requirements would be required for this project for the following reasons: o Fitness Centers/Health Clubs/Gyms are a recognized property type in the ENERGY STAR system, but they are not eligible to receive an ENERGY STAR score. This is because ENERGY STAR scores are calculated by comparing a project’s energy use to a nationally representative data set of similar facilities, and this information is not available for fitness centers/health clubs/gyms. o The Front’s expansion project will include natural gas-powered heating systems because, as a renovation and adaptive reuse project with ceiling heights over 60 feet, the facility cannot be efficiently heated with electricity alone. • Exception from the Loan Policy requirement of meeting six Public Benefit Criteria to qualify for primary financing. The project meets five Public Benefit Criteria. It is unable to meet Sustainability for the reasons stated above, but the project otherwise demonstrates a commitment to sustainable building design and operation. The project is also unable to meet Architecture and Urban Design because construction has begun and there is no opportunity for the required design review, but the project uses high quality, lasting materials and enhances the public realm. The five qualifying and two additional public benefit criteria are discussed in the Public Benefit Analysis below. Public Benefit Analysis RDA staff believes this project meets the following five Public Benefit Criteria: • Public Amenities o RDA Policy: The project includes one of the following public amenities that reinforces neighborhood character and scale: ▪ A significant open space or other publicly accessible amenity, or ▪ A significant public art amenity. o Staff Analysis: The Front has committed to providing a significant public art amenity on the exterior of the buildings. Pursuant to the RDA Art policy, an applicant meets the criteria for this public benefit criteria if 1.5% of the RDA contribution ($30,000) goes towards the installation of art onsite. • Adaptive Reuse o RDA Policy: The project will preserve or repurpose a building through the conversion of existing structures into new land uses that contribute positively to its surrounding neighborhood. o Staff Analysis: The Front’s Phase I-III expansion repurposes two existing cinder block warehouse buildings along 400 West, integrating them with the existing facility and resulting in a positive contribution to the surrounding neighborhood. • Permanent Job Creation o RDA Policy: The project will attract employers as permanent occupants that provide or retain jobs at or above a living wage. Project will create or retain at least one job per $50,000 receive in program funding. Jobs must be projected to pay a living wage of at least $15.00 per hour to qualify. o Staff Analysis: The Front’s expansion is expected to create opportunities for approximately 30-40 new jobs, all starting at $15 per hour or higher. 40 new jobs qualifies the project for $2,000,000 in funding. • Transit Alternatives o RDA Policy: The project meets one of the following standards: ▪ Includes a car sharing, bike sharing, or transit pass program that is widely available to employees/residents, or ▪ Is a commercial project that includes employee shower, locker, and bicycle facilities. o Staff Analysis: The project will add employee showers, lockers, and indoor bicycle parking. The project will also incentivize car share with a dedicated parking stall. • Economic Impact o RDA Policy: The project will catalyze economic impacts through one of the following: ▪ The project will remove blight through the rehabilitation/replacement of a vacant and distressed building, or construct a new building on vacant and distressed buildings, or construct a new building on vacant and underutilized land, or ▪ The project will provide essential services that are currently lacking in the neighborhood. ▪ The project will prioritize space for locally owned businesses. o Staff Analysis: The project will rehabilitate two older warehouse buildings and dedicate 100% of the space to locally owned business operations. The expansion is projected to directly increase property valuation by $5 million as well as increase the valuation of the surrounding properties by enhancing existing property and increasing foot traffic which could reduce crime. Projected revenue increase of $25 million over 5 years is projected to generate $2 million in local and state sales tax. In addition, RDA staff believes this project is close to meeting two additional Public Benefit Criteria but cannot because of factors specific to the project: • Sustainability – Not met; unique circumstances associated with facility type o RDA Policy: The project meets the RDA Sustainable Development Policy by avoiding the use of on-site fossil fuel consumption and achieving an Energy Use Intensity value corresponding with a Designed to Earn the ENERGY STAR score of 90 or greater. o Staff Analysis: The Front is committed to integrating sustainable design and building operation principles into its project. The Front sources 100% of its electricity from renewable sources through a rooftop solar array and the Rocky Mountain Power Blue Sky program. The Front’s expansion project is designed to result in a 24% decrease in electricity consumption, 31% decrease in electric peak, 3% decrease in gas consumption, and 21% decrease in utility costs compared to a building built to code. However, this project will be reusing and installing new natural gas heating systems due to the owner’s assessment that electric heating systems cannot efficiently heat this project because it is a renovation/adaptive reuse project and the facility’s ceiling heights are unusually tall. The project is also unable to calculate a Designed to Earn the ENERGY STAR score because energy use comparison data is limited for fitness/centers/health clubs/gyms. • Architecture and Urban Design – Not met; construction has already started o RDA Policy: The project will participate in a more thorough design review allowing the further refinement of design. Design review will promote developments that are constructed with high-quality materials, respond to the surrounding context, and enhance the public realm. o Staff Analysis: The design uses high-quality and lasting materials such as masonry, large windows, and Type II non-combustible construction. The project responds to the surrounding context by planting a landscape buffer between I-15 and the building, acting as a sound barrier to I-15, frames east-facing mountain views with large second-story windows in the new fitness studio, and turns part of an existing parking lot into an outdoor plaza space. The project enhances the public realm by punching street-facing windows into existing masonry walls. However, the renovation project has already been designed and is under construction so there is no opportunity for RDA to conduct a design review nor provide input on the design. POLICY ALIGNMENT: STATE STREET CRA PLAN The Project aligns with the RDA’s goals for the neighborhood, as adopted through the State Street Community Reinvestment Area Plan, as follows: • Neighborhood Revitalization o Ensure that RDA activities support high quality, enduring projects and promote sound architectural and urban design principles to encourage safe, sustainable, and livable neighborhoods. • Commercial Corridors o Target RDA programs and tools to leverage private investment for the revitalization of existing commercial and retail space while avoiding the displacement of established, locally-owned businesses. • Employment Centers o Ensure appropriate levels of office, commercial, and retail spaces are integrated into redevelopment projects to create synergies between uses and encourage a critical mass of people. o Work with Salt Lake City’s Business Development team to retain, recruit, and expand businesses within the Project Area, especially through the redevelopment of prime parcels along State Street or other corridors. PROJECT VIABILITY & ABILITY TO REPAY THE LOAN Rocky Ventures’ The Front Salt Lake City climbing gym buildings are financed with typical market loan-to-value rates. The two buildings being renovated by this expansion project (1420 S 400 W and 1450 S 400 W) were valued at a total of $6,300,000 in 2021. Together, they are financed at 57% loan to value as of June 30, 2023: Property 2021 Appraised Value Debt LTV 1420 S 400 W $ 3,600,000 $ 2,580,799 72% 1450 S 400 W $ 2,700,000 $ 1,022,341 38% Total $ 6,300,000 $ 3,603,140 57% When adding a $2,000,000 RDA loan, the potential loan-to-value lies somewhere between 52% and 68%, depending on how much appraised value the expansion project adds to the existing buildings. The applicant does not yet have an as-built appraisal but may be able to provide one upon request. Value1 Debt2 LTV Owner’s Equity As-is $8,440,000 $3,603,140 43% $4,836,860 As-Built3 $11,300,000 $5,603,140 50% $5,696,860 1November 1, 2023 appraised values 2June 30, 2023 balances 3Assuming construction complete on Phases I-III RDA staff is confident that the debt—likely to be around 50% LTV after completion of Phase III—is appropriate and likely to be repaid through regular business cash flow, or through the value of the collateral in a worst-case foreclosure scenario. UNDERWRITING PROCESS QUESTIONS Is the request for funds in accordance with RDA Loan Program Guidelines? The request is in accordance with most of the RDA Loan Program Guidelines, with the exception of the Sustainable Development Policy and the number of Public Benefit Criteria needed for the RDA to be a primary financer. Is the project financially feasible to complete development? After a review of The Front’s balance sheet, historic and current profit and loss statements, and future projections, RDA staff believes the project is financially feasible. Are there any undue financial benefits to the applicant, or is the owner’s projected return on equity unreasonably high? The Front invests a significant portion of profits back into the business. In his 2022 IRS tax return, the owner is shown to have taken a salary from Rocky Ventures, Inc which is below the 2023 Salt Lake City, UT HUD Metro FMR Area Median Family Income. RDA staff believes this salary is not unreasonably high and that the practice of reinvesting money into the business is aligned with RDA goals of encouraging private investment in its project areas. Additionally, The Front matches members’ ongoing donations to selected local nonprofit organizations. To date, The Front and its members have collectively donated over $540k to local nonprofit organizations. Are the capital sources for financing identified and reasonable? The Front is proposing two sources of capital for this expansion project: $3,000,000 in cash from the business’ cash flow and $2,000,000 in RDA debt. Staff believes the sources are secure and reasonable. Are RDA funds necessary and appropriate to the development? ]The project could potentially be completed without an RDA loan—as evidenced by the project starting construction without debt in place. While this expansion project could be completed with The Front’s cash flow, this would lengthen the timeline of the project, as The Front would be able to hire labor to do the work only when there is sufficient cash flow. Additionally, if The Front were able to secure financing from a traditional source, it would likely necessitate a refinance of the entire campus of properties at a higher interest rate, drastically increasing debt service payments. Are the developer’s capabilities and strength of collateral identified and reasonable? The owner is proposing to include 1420 South 400 West and 1450 South 400 West as collateral. As of June 30, 2023, The Front had $2,696,860 in equity between these two buildings. The Front’s owner, Dustin Buckthal, is also proposing to give the RDA a personal guarantee. PROPERTY OVERVIEW Rocky Estates, LLC (property ownership entity for Rocky Ventures) owns 5 parcels of land on 400 West between 1396 South and 1470 South. In total, the property measures 3.85 acres in size. The two properties being impacted by this expansion project are 1450 South and 1420 South. Each property holds a concrete masonry warehouse building. The building at 1450 South is home to the original The Front climbing gym in Salt Lake City and continues to house climbing walls. 1420 South is vacant and currently undergoing renovations and build out. All Rocky Estates, LLC properties in this area are zoned Commercial General. RDA FINANCE COMMITTEE RECOMMENDATION RDA staff presented this loan application to the RDA Finance Committee for a recommendation on November 15, 2023. The board voted unanimously to send a positive recommendation to the RDA Board to approve both policy exceptions and the loan application. During discussion, committee members discussed the business’ ability to repay the loan, reasoning for starting the expansion project without financing in place, fundraising for and donating to nonprofits, gym membership demographic makeup, membership fees, youth programs, and sliding-scale membership scholarships. ATTACHMENTS A.Loan Term Sheet B.Site Map C.Site Plan and Rendering D.Public Art Concept Plan E.Photos F.Construction Cost Estimate G.Supplemental Loan Application Document from The Front H.Resolution for Loan to Rocky Ventures, Inc. (dba The Front Climbing Club) ATTACHMENT A: RDA TERM SHEET APPLICANT Rocky Ventures ADDRESS 1470 South 400 West PROPOSED LOAN TERMS • Amount: $2,000,000 (40% LTC) • Interest Rate: RDA Loan Program Base Rate (U.S. Treasury Yield plus 3%) 7.60% Public Benefit Interest Rate Reduction1: • Public Amenities2 • Adaptive Reuse3 • Permanent Job Creation4 • Transit Alternatives5 • Economic Impact6 -0.5% -0.5% -0.5% -0.5% -0.5% Final Interest Rate7 5.10% 1To be eligible for interest rate reductions, the project will be required to meet the criteria outlined in Section V. Maximum interest rate reduction of 250 basis points. 2Project will provide significant public art amenity and meet RDA public art policy by spending 1.5% of RDA loan value on art 3Project will repurpose existing warehouse buildings 4Expansion will create 40 permanent jobs 5Project will provide showers, lockers, bike storage, and a dedicated car-sharing parking space 6Project will prioritize space for locally-owned business 7The interest rate provided is an estimate. The final interest rate will be based on the 3-year U.S. Treasury Yield Curve Rate, as determined by the term of the loan, at loan closing. LOAN TERM SHEET THE FRONT SLC EXPANSION • Term: 3 years • Amortization; 20 years • Disbursement: Loan proceeds shall be disbursed through construction draws. Any funds not disbursed 24 months after closing will be used to pay all outstanding interest and principal from the loan. To the extent that project sources exceed project uses at project close out as documented by the cost certification. • Expenses: Applicant will pay all loan expenses and closing costs, including title insurance. • Recourse: The loan shall be full recourse. COLLATERAL AND GUARANTEES • Second position lien on the properties at 1450 South 400 West and 1420 South 400 West. As of June 30, 2023, The Front had $2,696,860 in equity between these two buildings. • Personal guarantee from Dustin Buckthal, 100% owner of Rocky Ventures. CONDITIONS FOR LOAN CLOSING Prior to loan closing, the Applicant will complete the following: • RDA approves all terms of the loan. • Execute loan documents (e.g. promissory notes, loan agreements, security documents, and guarantees) as deemed necessary by the RDA and its legal counsel. • Receive approval from the RDA and its legal counsel of all matters pertaining to title, legality of the loan, and the legality, sufficiency, and the form and substance of all documents that are deemed reasonably necessary for the loan transaction. • Provide evidence of insurance in such amounts and with such coverage as deemed necessary by the RDA for the Property. • Obtain all required City approvals. • Such other terms as recommended by the RDA’s legal counsel and staff. OTHER CONDITIONS • The Project shall operate as the intended use over the term. • The Project shall remain in good financial and legal standing over the term. ATTACHMENT B: SITE MAP Yellow – Rocky Estates, LLC property Green – Properties used in Phase I-IV expansion project ATTACHMENT C: SITE PLAN AND RENDERING ATTACHMENT D: PUBLIC ART CONCEPT PLAN ATTACHMENT E: SITE PHOTOS Aerial Photo Photo of 1450 South 400 West Subject Buildings Photo of 1420 South 400 West ATTACHMENT F: CONSTRUCTION COST ESTIMATE ATTACHMENT G: SUPPLEMENTAL LOAN APPLICATION DOCUMENT FROM THE FRONT THEFRONTCLIMBINGCLUB.COM // 1 RDA Loan Application Loan application materials provided by Dustin Buckthal, Owner and CEO; Justin Wyse, Chief of Staff; Melanie Thompson, Director of Community Impact; Matty Coles, Senior Director of Operations; Cassidy Wasko, Creative Design Manager Additional copy provided by Allison Hahn, Group Fitness Manager; SJ Burkholz, Yoga Manager; McKenna Guilds, Adaptive Program Coordinator; Keely Carolan, Youth Programs Manager; David Farkas, Adult Programs Manager; Zach Scott, Youth and Adult Programs Manager Renders provided by VY Architecture THEFRONTCLIMBINGCLUB.COM // 2 Project Summary Expansion and Renovation The project entails the remodel of our existing climbing gym and an adjacent warehouse located at 1420 S 400 W and 1450 S 400 W in Salt Lake City, UT in the State Street community reinvestment area. The expansion is located on 1.00 + 0.63 acre parcels that will be combined with this project. The buildings will be combined into a single facility, estimated to be approximately 70,000 SF, with an expected budget of $5mm. Below is an overview of the project scope:  Parking redesign and a green buffer along the building facades  Entry space, including a reception desk  Climbing areas, including 60-foot-tall sport climbing walls, substantial bouldering terrain, and a specialized climbing training floor  Integrated weight training areas  Cardio exercise areas  Group exercise rooms for yoga, yoga training, and group fitness  Lounge space integrated throughout  Gym support spaces including restrooms and locker rooms  Operational support spaces including integration of a small staff breakroom, AV room, and storage spaces  Redesign of the linkage between 1470 S 400 W and 1450 S 400 W Securing funding from the RDA Loan is imperative to expedite the project's progression through Phases 1-3. Given the scarcity of loan prospects in today's economic landscape, leveraging RDA's funding would not only accelerate our project's completion but also swiftly generate a tangible positive influence within the Salt Lake community. The buildings will be combined into a single facility, estimated to be approximately 70,000 SF. RDA // $2mm Cash // $3mm T OTAL // $5 MM Sources Uses Construction // $5mm THEFRONTCLIMBINGCLUB.COM // 3 Project Phasing The project will be completed in two parts, with the RDA loan funding phases 1-3. PHASES 1 – 3 : WHERE FUNDING WILL BE UTILIZED  Phase 1, started March 2023, estimated completion November 2023: Additional entry to facility, addition of fitness class studios, gender-neutral bathrooms and showers, and temporary climbing training areas, replacement of mechanical and electrical systems, addition of large windows.  Phase 2, November 2023 to February 2023: Removal of buildouts and addition of climbing walls, addition of large windows, connection of 1420 and 1450 buildings, replacement of mechanical and electricals, addition of fire suppression system, addition of staff break room.  Phase 3, March 2023 to May 2023: Addition of fire suppression system, replacement of electrical and mechanical system, connection of direct courtyard access, addition of gender-neutral bathrooms. PHASE 4  Phase 4, June 2024 to June 2025: Raising building to 60ft, adding additional space for weights and cardio equipment, addition of yoga facilities, addition of World Cup and Olympic style route and bouldering walls for athlete training and hosting international competitions, replacement of mechanical and electrical systems. THEFRONTCLIMBINGCLUB.COM // 4 Who We Are Merging Heritage and Innovation The Front began in 1989 as a co-op climbing gym called the Bodyshop, located in Sandy, and was led by local legend Dave Bell. Years later, the business was purchased by Kristian Merwin. The facility moved locations and was renamed The Wasatch Front. In 1998 the business was acquired by Mike Uchitel and moved at last to its current location at 1450 S 400 W. The new facility was built to host national climbing competitions and renamed The Front. It was the adolescent years of business, and it made a name for itself! Archival footage of Professional Climbers Association competitions captures iconic climbers such as Chris Sharma and Tommy Caldwell pushing their limits on our unique wooden walls. In 2005, The Front was acquired by now current owner Dustin Buckthal. Fueled by a commitment to progress, The Front partnered with climbing wall builder and all-around gym supplier Vertical Solutions and Hannah Vaughn at MHTN to infuse architectural brilliance into a 2016 expansion. This evolution led to 60-foot top rope and lead climbing walls, enriched bouldering zones, revitalizing saunas, and a youth-centric School Room. The Front is a vibrant community space dedicated to creating enriching experiences, deepening community ties, and creating sustainable foundations that underlie everything we do. Our community access initiatives afford a growing and diverse population of Salt Lake residents’ affordable access to our world class facilities where they can build community over shared experiences and a love for climbing. Beyond our walls, we amplify the positive change initiated by local non-profits through our Impact Coalition, where members pledge monthly donations to our non-profit partners, which The Front matches dollar for dollar. Since its formation the Impact Coalition has raised over $540k for these local nonprofits. The Front is more than a climbing gym; it's a nexus of connections, experiences, and growth. Our events kindle fellowship, our programs embrace diversity, and our commitment to sustainability ignites a greener future. With Come as you are, we’ll send you home stronger. THEFRONTCLIMBINGCLUB.COM // 5 your support, The Front will continue to inspire, innovate, and elevate, forging a path where heritage meets innovation, and community thrives. Come as you are, we’ll send you home stronger. Community Access Initiatives The Front employs a variety of community programs to support inclusivity and accessibility at our facilities, including the support of community groups and scholarship-based access to membership and youth programs. Our community access initiatives aim to empower individuals to conquer both the vertical walls in front of them and any other obstacles that come their way in life. Community Climbing Groups Our community climbing groups empower underrepresented populations. These community- led groups help to promote inclusivity and hold space for shared experiences. They are supported by The Front through access to discounted rates, free rental gear, and support on special events from Front staff. These groups include Color the Wasatch, Salt Lake Area Queer Climbers (SLAQC), Escaladores Unidos, All Bodies Climb, and Ladies Climbing Coalition. Community Access Membership Program We will be launching our Community Access Membership Program (CAMP) in Winter 2023, providing low-cost or free access to gym memberships at The Front for individuals in the community experiencing financial hardship. The goal of this program is to enhance access to our facilities and increase the availability of health and wellness resources for members of our community that could not otherwise afford it. Preliminarily, this program will provide gym access to 60 individuals, with the intention of providing additional opportunities after a trial phase is completed. The membership will last for 6 months, after which the individuals’ eligibility will be reassessed. The program will have a low barrier to entry, a simple application process, and a pay-what-you-can membership model. The program will be trialed with local nonprofits in the area like VOA of Utah and refugee centers, who work with populations that could benefit from affordable access to health resources. Our community climbing groups empower underrepresented populations. THEFRONTCLIMBINGCLUB.COM // 6 Youth Scholarship Program The Front recently launched a youth scholarship program driven by a clear vision: to promote equitable access to the sport of rock climbing and support the local communities surrounding The Front by offering children transformative opportunities to grow and succeed. We recognize that many young individuals in our community face financial and cultural barriers that hinder their participation in sports like rock climbing. We are committed to creating an inclusive environment where youth can not only develop their climbing abilities but also cultivate life-long values such as perseverance, self-confidence, and teamwork. Giving Back The Impact Coalition We founded the Impact Coalition program in 2018 to provide consistent support for nonprofits making positive impacts in our local community. Every one of our members has the option to add a recurring donation as small as $1 to their membership, and we match them dollar for dollar. Today, we support 5 local nonprofits and in 2022, raised over $170k through the Impact Coalition. One of our Impact Coalition partners, Utah Clean Energy (UCE), is committed to creating a future that ensures healthy, thriving communities for all, empowered and sustained by clean energy. They achieve this work through a variety of programs related to transitioning to renewable energy, reducing emissions in homes and buildings, promoting climate change leadership, and supporting clean and electric transportation initiatives. To date we have directed over $540k to local non-profits. THEFRONTCLIMBINGCLUB.COM // 7 2018 2019 2020 2022 The Impact Coalition is founded in May, the first month pulling in a matched $110. (Don’t worry, the donations basically double month over month in 2018 after that!) Impact Co. events begin, with Utah Clean Energy tabling and earning support at that years’ Climbing Up For Air in partnership with Running Up For Air and Jared Campbell. CAWS begins Fursdays, bringing adoptable animals supported by the Impact Co. to the Salt Lake City Front and to potential new foster parents and adopters. The Impact Coalition hits $100k of total matched donations in November of 2020, continuing to provide support to our nonprofit partners after a dip in charitable donations caused by the COVID-19 pandemic. After hitting the match cap of $40k member contributions in 2021, The Front removes the cap and now matches all Impact Co. donations made by its members. Impact Co. Timeline Combined Annual Donations 2018: $8,203 2019: $41,228 2020: $59,656 2021: $128,954 2022: $168,127 2023: est. +$175,000 ($114,852 AT END OF AUGUST) Combined Monthly Donations THEFRONTCLIMBINGCLUB.COM // 8 Amenities and Programs Adaptive Programs The Adaptive Program started as a community group and eventually grew into a larger, company-staffed program so that The Front could provide proper training for staff and quality programming to the adaptive community. Adaptive programs include a monthly adaptive meet up, collaboration between The Front and the National Abilities Center (NAC) to include weekly 1:1 sessions for people of all ability levels, and a staffed Adaptive Competitive Team that helps athletes with disabilities work towards competing at a professional level. We host a variety of events that support the adaptive community, including the Paraclimbing World Cup, an adaptive film festival, Guide Dogs in Training, and many other adaptive focused events. We host a variety of events that support the adaptive community, including the Paraclimbing World Cup. Adult Programs Our adult programs offer a pipeline for new climbers to gain the skills and knowledge they need to reach their personal climbing goals. This climbing pathway, called the Ascent Series, creates seamless movement between different climbing levels, enabling each climber to advance at a pace that aligns with their unique abilities and aspirations. Café and Courtyard In 2018 we introduced Rumsy’s café, a restaurant and dynamic co-working space, on our facility’s top floor. Our kitchen provides a rotating menu of specials and catering for larger events. THEFRONTCLIMBINGCLUB.COM // 9 Our beautifully landscaped outdoor courtyard provides gathering areas and shade for our members and visitors during warmer months. Our programs often take advantage of this space by offering periodic outdoor fitness or yoga classes. Youth teams will frequently gather here to discuss training plans, and we host community events in this space ranging from bicycle maintenance workshops to competition after-parties. Youth Programs The Front offers a robust youth programs pipeline from the introductory level all the way to the highest level of competitive rock climbing. Our vision is to foster a powerful and positive impact on the development of children in our community while providing educational opportunities for each step of the climbing journey. The sport of climbing provides youth with the development of problem- solving skills, increases confidence, and builds powerful friendships. Community Events The Front is continuously deepening its emotional depth and connection to the community by offering unique and memorable events. Our events highlight our state-of-the-art facilities and set The Front apart as the neighborhood “third place,” where individuals can gather and build community outside of home and work. You can see this unfolding at Summer Music Nights where hundreds of people from the community After School Program Recreational Team Intermediate Team Competition Team Our beautifully landscaped outdoor courtyard provides gathering areas and shade. THEFRONTCLIMBINGCLUB.COM // 10 join to watch live music and share food after their climbing session, and you can see it through the unparalleled excitement and energy at our climbing competitions. The Front has an active relationship with USA Climbing, the official governing body of competition climbing in the U.S. Hosting several USA Climbing competitions each year allows us to bring significant cultural events with a global audience to this neighborhood. We also host volunteer opportunities with local nonprofits, such as the VOA of Utah, that are open to members and staff and anyone else from the community that wishes to participate. Our in-house and external events alike all have a focus on promoting social interaction and reinforcing the identity and character of our neighborhood. Group Fitness Our group fitness program provides one-of-a-kind classes that create a safe space to learn and pathways for continuous, individualized progression based on an athlete’s personal goals. Classes range from introductory to advanced. We offer specialized classes such as barre, mat Pilates, mobility, mountain sports conditioning, bootcamps, foam rolling, women’s- specific powerlifting, spin, and yoga-based ab training in addition to traditional fitness classes such as HIIT and strength training. Yoga We believe that consistent yoga practice can help improve people's happiness and health and reduce stress levels. We offer the first class free to anyone who would like to try it out, and our membership prices make yoga much more accessible than traditional studio membership pricing. Classes are available throughout the day, every day of the week. We provide 16 unique styles of yoga, plus tai chi and adaptive yoga for those with disabilities so that anyone can find a style that suits them. Hosting several USA Climbing competitions each year allows us to bring significant cultural events with a global audience to this neighborhood. THEFRONTCLIMBINGCLUB.COM // 11 How We Qualify 1. Sustainability OUR EXPANSION WILL INTEGRATE SUSTAINABLE DESIGN PRINCIPLES AND MAINTAIN OUR PARTICIPATION IN ROCKY MOUNTAIN POWER’S BLUE SKY PROGRAM. Utilizing sustainable energy and supporting similar initiatives is a main priority for The Front. We have developed numerous channels to ensure that our sustainability initiatives are comprehensive and current. Elevating our sustainability commitment, we've offset power consumption and reduced our energy usage by over 30%. With the loan's potential, we aim to further position The Front as a beacon of excellence in sustainable business practices. Offsetting Energy Consumption In 2010, we installed a rooftop 7.6kw solar array at our SLC location and in 2019 a 30kw solar array at South Main to further offset our energy needs. In 2007, The Front joined Rocky Mountain Power's Blue Sky Program – offsetting 100% of our SLC power consumption with wind and solar-generated electricity. In 2022, we received the Green Small Business Legacy Award which honors companies that are improving air quality, reducing emissions, and making strides toward Utah’s environmental sustainability. The Front obtained this award by having 100% of its electricity usage derived from renewable energy sources at our SLC location. Recycling and Compost We have been a free community glass drop off location since 2011 and have offered battery recycling since 2013. In 2019, Rumsy's joined the Wasatch Resource Recovery commercial compost program and now offers only compostable single-use disposables. Electric Vehicle Stations We have 12 EV stations in Salt Lake's parking lots with an additional 12 spots installed at South Main in 2020. In 2022, we received the Green Small Business Legacy Award. THEFRONTCLIMBINGCLUB.COM // 12 Mechanical Approach The building uses an evaporative cooling system paired with radiant tube heaters – a system well-suited for the volume of space, use as a gym, and effectiveness in Salt Lake’s climate. The evaporative cooling is an energy efficient strategy that requires less energy than a typical AC. An efficient all-electric system, known as Variable Refrigerant Flow (VRF), is also in place to serve certain enclosed exercise spaces. The Front HQ uses the most efficient and state of the art lighting design modeling. The entire lighting system employs integral high-efficiency LED luminaires used to maximize efficiency and visual comfort for the building users. In addition, the latest in digital lighting control systems have been used to save energy and extend the life of the lighting products. This carefully programmed and tuned system uses astronomical time-clock functions and occupancy sensors in every room to garner a 59% better than code compliance for the interior lighting, and 82% better than code for exterior lighting. Please refer to the Electrical COMcheck attachment for additional information. 2. Public Amenities THE EXPANSION PROJECT WILL PROVIDE ADDITIONAL OUTDOOR GREEN SPACES, VERSATILE COMMUNITY GATHERING SPACES, EVENTS SUPPORTING LOCAL ARTS AND THE INTRODUCTION OF INNOVATIVE EDUCATIONAL AMENITIES. The Front HQ expansion builds out the Front Climbing Club’s downtown campus with more space to grow our successful amenities: yoga, fitness, youth programs, adaptive programs, live music, competitions and events, community impact groups, workspaces, outdoor areas, and even a ceramics and pottery studio. All these amenities are designed to enhance community and cultivate a positive learning environment that supports continuous growth. The expansion will allow substantial public amenity access, including the introduction of new educational amenities like the ceramics and pottery studio. The character of the gym has a strong presence in the Ballpark neighborhood – a neighborhood The Front HQ uses the most efficient and state of the art lighting design modeling. THEFRONTCLIMBINGCLUB.COM // 13 that is currently undergoing a transformation from manufacturing and industry to a neighborhood with residential buildings and other walkable services. The Front has been a pioneer in inviting pedestrian traffic to the neighborhood, and hosting events that draw visitors from near and far. 3. Permanent Job Creation & Retention OUR EXPANSION IS EXPECTED TO CREATE OPPORTUNITIES FOR APPROXIMATELY 30-40 NEW JOBS, ALL STARTING AT $16 HOURLY OR HIGHER. A diverse array of employment opportunities is on the horizon, encompassing full-time, part-time, and seasonal roles that span from program instruction to high-level managerial positions, as well as technical functions such as full-time route setters who craft the engaging climbing experiences we offer to the community. The Front takes great pride in its robust internal professional development pipeline, which furnishes employees with educational pathways for upward mobility within the company. This commitment is underscored by distinct progression systems within each department, intricately linking career advancement and educational avenues to wage escalations. Wage Average # Of employees Front Desk (hourly) $17.14 43 Route Setting (hourly) $20.81 12 Climbing Instructor (hourly) $20.62 49 Fitness Instructor (hourly) $33.08 26 Yoga Instructor (hourly) $47.31 28 Office Staff (salary) $41,959.43 44 Leadership (salary) $73,886.19 7 Our SLC location spans 34,913 square feet and maintains an employee density of approximately 1 employee per 266 square feet, with a total of 131 active employees contributing to that site. With the forthcoming expansion set to provide an additional 34,761 square feet, we envision the creation of 30 to 40 new permanent positions distributed across various departments. Projections considering employees per square foot suggest that as our enterprise flourishes, the potential arises for the generation of over 100 fresh roles at our expansion, further amplifying our positive influence within the Salt Lake community. THEFRONTCLIMBINGCLUB.COM // 14 4. Adaptive Reuse Renovation & Addition Our expansion project will revitalize, preserve, and repurpose previously used and unused CMU warehouse structures along 400 W, integrating them with our existing facility, resulting in a positive contribution to the surrounding neighborhood. The CMU of the buildings will remain intact, as a durable material that is in good condition, and will be modified to include larger openings and high-efficiency fenestrations. By re-using the existing building, the need for new building materials is reduced and the lifespan of the existing structure is prolonged. In addition to re-using most of the existing building shells, the site parking and landscaping design re-uses as much of the existing layout as possible in order to minimize the embodied energy of new materials, and to maximize the lifespan of existing conditions and infrastructure. Our expansion project will revitalize, preserve, and repurpose previously used and unused CMU warehouse structures. 1450 S 400 W, which was home to the original Front Climbing Club location, will be renovated, creating a planted buffer zone around the building for safe pedestrian access. Improvements will be made to the connection of the interior with the landscape, with additional natural light and visibility to the surrounding site and streetscape. 1420 S 400 W will receive a significant vertical addition along the north side, which will house more climbing area, as well as additional exercise and training spaces. The building will also have an additional entry point into the Front, further activating the connection to 400 W. THEFRONTCLIMBINGCLUB.COM // 15 5. Transit Alternatives Our expansion will nearly double our existing employee showers, locker rooms, bicycle facilities and bicycle valet program. The Front’s SLC location is within 0.6 miles of the Ballpark Trax Station, and within 0.2 miles of Bus Route 9’s 1300 S & 400 W bus stop. The new bike lane on 300 W connects bikers safely to the gym, where ample protected bike parking is provided both at the exterior and interior of the facility. Users and staff have access to lockers and showers on-site. A car-sharing parking stall is provided on site to encourage alternative methods of transit. Several car- charging stations are available on the existing site and in the Front expansion. The Front encourages bike commuting through our Ride for Rewards program. Each time participants push pedals instead of gas to get to the gym, they are entered into a monthly drawing for gear from our pro shop. In addition, members can also complete a punch card for a smoothie at Rumsy's, the gym’s café. Our expansion will nearly double our existing employee showers, locker rooms, bicycle facilities and bicycle valet program. THEFRONTCLIMBINGCLUB.COM // 16 6. Economic Impact The expansion will rehabilitate adjacent warehouse buildings to eliminate blight while simultaneously allocating dedicated space for local enterprises. These businesses include The Front, Testpiece, Vertical Solutions, and retail areas showcasing local brands like Petzl and Black Diamond – and offering tabling partnerships at our events with various other local vendors. The expansion is projected to directly increase property valuation by $5mm as well as increase the valuation of the surrounding properties by reducing blight and crime. Projected revenue increase of $25mm over 5 years will generate upward of $2mm in local and state sales tax. As a locally owned business, our project aligns with efforts to rehabilitate and redevelop the neighborhood. WE AVERAGE OVER 1,000 CHECK-INS EACH DAY and we stock a comprehensive retail shop that includes products from locally owned businesses. We support local artists through events such as Makers Market nights, and we feature local artwork in our facilities which artists can sell with no commission collected by The Front. Funding for this project will also support jobs for locally owned businesses including climbing wall manufacturer Vertical Solutions and local architecture firm VY Architecture. The expansion will rehabilitate adjacent warehouse buildings to eliminate blight while simultaneously allocating dedicated space for local enterprises. THEFRONTCLIMBINGCLUB.COM // 17 7. Architecture & Urban Design OUR EXPANSION PROJECT WAS DESIGNED BY LOCAL ARCHITECTURAL FIRM VY ARCHITECTURE WITH REVIEW FROM OUR COMPANY LEADERSHIP TEAM. Our design promotes high quality materials, responds to the surrounding context, and enhances the public realm. Architecture The renovation of 1450 S 400 W will repurpose the facade with additional openings, inundating the interiors with natural light, connecting the interior spaces to the exterior and the pedestrian realm. The facade upgrade transforms the elevations of the CMU warehouse building from rigid and industrial to dynamic and engaging, modernizing the industrial feel of the neighborhood without removing its character. Additional exterior spaces are transparent and connected to the surrounding neighborhood, sharing the activity of the interior with the environment. INCLUDED IN OUR PLAN IS SPACE FOR A PERMANENT PUBLIC ART INSTALLATION THAT WILL CONTRIBUTE TO THE VISUAL IMPROVEMENT OF THE NEIGHBORHOOD. Urban Design In addition to the facade upgrade of the existing CMU structures, the vertical addition at 1420 S 400 W establishes a cohesive design language with the tall portion of the existing gym facility at 1470 S 400 W. These two elevated portions of the building hint at the vertical programming on the interior and are identifiable silhouettes along I-15, a shadowed reference to the skyline surrounding SLC. The landscaping approach of both the existing Front facility, and the Front HQ expansion promote dense, native, low-water species. Going far beyond the minimum landscape requirements, the generous landscaping coupled with areas for bicycles, and pedestrian friendly routes, contributes greatly to the revitalization of the surrounding area, setting an elevated standard for the local urban fabric. The Front’s campus design promotes pedestrian movement and activity through the addition of sidewalks, appropriate lighting, landscaping, and buildings that have numerous windows that look out to the streets and engage the surrounding area. THE ARCHITECTURE IS ALSO DISTINCTIVE AND RECOGNIZABLE ON THE SLC SKYLINE – A SILHOUETTED REFERENCE TO THE JAGGED WASATCH BEYOND. The Front HQ expansion continues that formal dialogue, creating an additional layer. Pushed up against I-15, the Front campus seeks to block some of the noise along the western edge and create a pedestrian friendly campus along the east side, replete with heavy tree-planting that acts as an additional acoustic filter and air purifier. THEFRONTCLIMBINGCLUB.COM // 18 Public Benefits Sustainability Our expansion will integrate sustainable design principles and maintain our participation in Rocky Mountain Power’s Blue Sky Program. Public Amenities The expansion project will provide additional outdoor green spaces, versatile community gathering spaces, and events supporting local arts. It will include the expansion of existing amenities such as our adaptive program and community group access as well as new offerings including our ceramics and pottery program. Adaptive Reuse Our expansion project will revitalize, preserve, and repurpose previously used and unused CMU warehouse structures along 400 W, integrating them with our existing facility, resulting in a positive contribution to the surrounding neighborhood. Permanent Job Creation Our expansion is expected to create opportunities for approximately 40 new jobs, all starting at $16 hourly or higher. Architecture and Urban Design Our expansion project was designed by local architectural firm VY Architecture with review from our company leadership team. Our design promotes high quality materials, responds to the surrounding context, and enhances the public realm via architectural choices and a public art installation. Transit Alternatives Our expansion will nearly double our existing employee showers, locker rooms, bicycle facilities and bicycle valet program. A car-sharing parking stall is provided on site to encourage alternative methods of transit. Economic Impact The expansion will rehabilitate adjacent warehouse buildings to eliminate blight while simultaneously allocating dedicated space for local enterprises. The expansion is projected to directly increase property valuation by $5mm as well as increase the valuation of the surrounding properties by reducing blight and crime. Projected revenue increase of $25mm over 5 years will generate upward of $2mm in local and state sales tax. 1 2 3 4 5 6 7 REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. _____ LOAN TO ROCKY VENTURES, INC. (DBA THE FRONT CLIMBING CLUB) RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY APPROVING THE TERM SHEET OF A LOAN TO ROCKY VENTURES, INC. FOR CONSTRUCTION OF AN EXPANSION OF THE FRONT CLIMBING GYM WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the business and exercise the powers provided for in the Utah Community Reinvestment Agency Act (the “Act”). WHEREAS, the Act grants the RDA powers to use funds to provide for project area development within project area boundaries. WHEREAS, the RDA has an RDA Loan Program (“Program”), the purpose of which is to promote economic development, encourage private investment, and enhance project area vitality. WHEREAS, on October 18, 2016, the RDA Board adopted Resolution No. R-37-2016, establishing policy guidelines for the RDA Loan Program (the “Policy”). WHEREAS, pursuant to the Policy, Rocky Ventures, Inc. (the “Borrower”) submitted an application for a loan to expand The Front Climbing Club, a climbing gym located within the RDA’s State Street project area, by remodeling the existing structure and adaptively reusing an adjacent vacant warehouse (the “Project”). WHEREAS, the Project requires two waivers for aspects of the Project that do not follow RDA policies: one waiver from the Sustainable Development Policy because this Project does not meet the threshold requirements, and one waiver from the RDA Loan Program Policy that requires the Project to meet six or more Public Benefit Criteria to receive a primary loan from the RDA. WHEREAS, the RDA Finance Committee reviewed the proposed loan application in a meeting on November 15, 2023 and voted to recommend the loan to the RDA Board for approval. WHEREAS, in conjunction with the RDA Finance Committee’s recommendations, the RDA staff recommends the attached set of terms (the “Term Sheet”) for a loan in the amount of $2,000,000 to the Borrower for construction of the Project (the “Construction Loan”). WHEREAS, RDA staff further requests the RDA Board approve the two policy waivers from the for the Project, as also described in the Term Sheet. NOW, THEREFORE, BE IT RESOLVED by the Board that it approves the two policy waivers for the Project, and further approves the Construction Loan as outlined in the Term Sheet attached hereto, subject to revisions that do not materially affect the rights and obligations of the RDA hereunder. The Board authorizes the Executive Director 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 office. Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this day of , 2023. Alejandro Puy, Chair Approved as to form: Sara Montoya Salt Lake City Attorney’s Office Date: November 22, 2023 The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Attest: City Recorder LOAN TERM SHEET ROCKY VENTURES, INC. (DBA THE FRONT CLIMBING CLUB) 1470 South 400 West The terms described on this Term Sheet represent the terms for a primary construction loan to fund Rocky Ventures, Inc.’s (“Borrower’s”) expansion project of their climbing gym located in the RDA’s State Street Project Area. The project will allow the Borrower to remodel the existing structure and adaptively reuse an adjacent vacant warehouse, combining three buildings into one single facility that will offer approximately 70,000 square feet of space. This expansion project will add climbing walls, fitness studios, bathrooms and showers, a staff break room, storage space, and various mechanical, electrical, and fire suppression systems. The loan, as requested from the Borrower, requires two waivers for aspects of the project that do not follow RDA policies: a waiver from the Sustainable Development Policy that prohibits on-site natural gas combustion and requires the project to achieve a Designed to Earn ENERGY STAR score of 90 or higher or an Energy Use Intensity that is comparable to this score (the project will include on-site natural gas combustion, and an ENERGY STAR score cannot be calculated for this facility type), and a second waiver from the Loan Program Policy that requires projects receiving primary loans to meet six or more Public Benefit Criteria (the project meets five). LOAN TERMS Borrower: Rocky Ventures, Inc. Property: 1420 South 400 West and 1450 South 400 West Amount: Not to exceed $2,000,000 Source of funds: Revolving Loan Fund Project Description: The project will include remodeling the existing structures at 1420 South 400 West and 1450 South 400 West, combining three buildings into one single facility that will offer approximately 70,000 square feet of space. This expansion project will add climbing walls, fitness studios, bathrooms and showers, a staff break room, storage space, and various mechanical, electrical, and fire suppression systems. Public Benefits: Public Amenities: The project must include a significant public art amenity on the exterior of the buildings, using at least 1.5% of the RDA contribution ($30,000) for such art. Adaptive Reuse: The project’s expansion must repurpose two existing cinder block warehouse buildings along 400 West, integrating them with the existing facility and resulting in a positive contribution to the surrounding neighborhood. Permanent Job Creation: The project’s expansion must create opportunities for 40 new jobs, all starting at $15/hour or higher. Transit Alternatives: The project will add employee showers, lockers, and indoor bicycle parking, as well as incentivize car share with a dedicated parking stall. Economic Impact: The project will rehabilitate two older warehouse buildings and dedicate 100% of the space to locally owned business operations. Term: 3 years Amortization: 20 years Interest Rate: 5.10% Interest Rate* Interest shall accrue during construction, beginning upon the first disbursement of funds. Accrued interest during construction to be added to the loan balance. Repayment Monthly amortized payments commence following receipt of Certificate of Occupancy. A balloon payment of any outstanding balance shall be due upon maturity. Collateral: A second-position mortgage lien on the properties located at 1450 South 400 West and 1420 South 400 West. Guarantors: Unconditional repayment personal guarantee from Dustin Buckthal, 100% owner of Rocky Ventures, Inc.. Disbursement: Loan proceeds shall be disbursed through construction draws. Any funds not disbursed 24 months after closing will be applied to outstanding interest and principal on the loan. Fees: Closing costs and legal fees shall be paid by the Borrower including, but not limited to, the cost of title search and insurance, credit reports, and attorney fees. Fees will be payable at loan closing. Use of Funds Funds shall be used for construction costs associated with the renovation of 1420 South 400 West and 1450 South 400 West. *Interest rate to be determined on closing day based on current 3-year US Treasury Par Yield Curve Rate CONDITIONS FOR LOAN CLOSING • Borrower meets all terms of the loan. • RDA approves final schedule of sources and uses and the project proforma. • The parties agree on the form of the loan documents (e.g. promissory notes, loan agreements, security documents, and guarantees) as deemed necessary by the RDA and its legal counsel. • Borrower receive and comply with all necessary approvals from the City, as further defined in the loan agreement. • Borrower to receive approval from the RDA and its legal counsel of all matters pertaining to title, legality of the loan, and the legality, sufficiency, and the form and substance of all documents that are deemed reasonably necessary for the loan transaction. • Borrower to provide evidence of insurance in such amounts and with such coverage as deemed necessary by the RDA for the Property. • Such other terms as recommended by the RDA’s legal counsel and staff.