Loading...
Transmittal - 5/23/2024DEPARTMENT of ECONOMIC DEVELOPMENT ERIN MENDENHALL MAYOR LORENA RIFFO-JENSON DIRECTOR CITY COUNCIL TRANSMITTAL _______________________ Date Received: ___________ Jill Love, Chief Administrative Officer Date sent to Council: ___________ __________________________________________________________________ TO: Salt Lake City Council DATE: May 20, 2024 Victoria Petro, Chair FROM: Lorena Riffo-Jenson, Director, Department of Economic Development SUBJECT: Economic Development Revolving Loan Fund (EDLF) – Shades of Pale, Inc. STAFF CONTACTS: Roberta Reichgelt, Business Development Director, Roberta.reichgelt@slcgov.com Project Manager, Will Wright, William.wright@slcgov.com DOCUMENT TYPE: Loan Approval RECOMMENDATION: The EDLF Loan Committee recommends approval of a $350,000 loan to Shades of Pale. BUDGET IMPACT: $350,000 from the Economic Development Loan Fund BACKGROUND/DISCUSSION: On May 9, 2024, a loan request from Shades of Pale was presented to the EDLF Loan Committee for review and discussion. Shades of Pale is a local microbrewer with a regional distribution. Basic Loan request Business Name: Shades of Pale Address: 1388 South 300 West Loan Amount Requested: $350,000 Loan Term: 7 years. Interest Rate: 10.5% Use of Funds: Remodel, Equipment, Working Capital Loan Type: (Expansion) Council District: District 5 Reasoning behind staff recommendation Jill Love (May 23, 2024 16:20 MDT) Jill Love 05/23/2024 05/23/2024 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 is the loan recommended to be reviewed by the Loan Committee members. Upon a thorough review of the Loan Committee members, 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 addition, the EDLF loans meets the following goals of the Economic Development Loan Fund as stated in the EDLF program guidelines. • Increasing employment opportunities. • Stimulating business development. • Encouraging private investment. • Enhancing neighborhood vitality. • Boosting commercial enterprise. This loan will assist in the creation of 10 new jobs in the next year and retention of 11 current jobs. This loan was recommended by the EDLF Committee to the City Council for approval. EDLF Loan Balances 1. As reported by The Finance Department on April 2024, the EDLF available fund balance is approximately: $6,700,000. 2. As of May 6, 2024, the amount of outstanding loans total is: $3,240,998. EDLF Loan Committee There is 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 Ordinance SALT LAKE CITY ORDINANCE No. _____ of 2024 (Ordinance approving a $350,000 loan for Shades of Pale, Inc., at 1388 South 300 West 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, the 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 $350,000 loan to Shades of Pale, Inc., a local business located at 1388 South 300 West. NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah, that: SECTION 1. Loan Approval. The City Council approves the loan outlined in the Term Sheet attached hereto, subject to revisions that do not materially affect 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 office. SECTION 2. Effective Date. This ordinance shall become effective on the date of its first publication. Passed by the City Council of Salt Lake City, Utah, this ______ day of _____________________, 2024. Victoria Petro, Council Chair ATTEST AND COUNTERSIGN: ______________________________ CITY RECORDER Transmitted to Mayor on _______________________. Mayor's Action: _______Approved. _______Vetoed. ______________________________ MAYOR ______________________________ CITY RECORDER (SEAL) Bill No. ________ of 2024. Published: ______________. APPROVED AS TO FORM Salt Lake City Attorney’s Office Date: Sara Montoya, City Attorney May 14, 2024 LOAN TERM SHEET Applicant: Shades of Pale, Inc. Address: 1388 South 300 West Proposed Loan Terms Loan Amount: $350,000 Loan Term: 7 Years Interest Rate Calculation Prime Interest Rate: 8.5% (at the time of application on October 30, 2023). Plus EDLF Charge: 4% Less Discount: 1% for each • Priority Area (RDA State Street Project Area) • Socially and Economically Disadvantaged Individuals (SEDI), woman owned, Latina owned. Final Interest Rate: 10.5% Use of Funds: Renovation, Machinery, Equipment, Working Capital Business Type: Existing Collateral: Equipment Personal Guarantees: Jennifer Alexandra Ortiz Conditions for Closing • Obtain all City approvals, execute all loan documents as deemed necessary by City legal counsel and DED staff, such other terms as recommended by City legal counsel and DED staff.