HomeMy WebLinkAboutTransmittal - 10/25/2024SALT LAKE CITY TRANSMITTAL
To:
Salt Lake City Council Chair
Start Date:
10/22/2024
Date Sent to Council:
10/25/2024
From:
Employee Name:
Reichgelt, Roberta
E-mail
roberta.reichgelt@slc.gov
Department
Economic Development
Department Director Signature Chief Administrator Officer's Signature*
Director Signed Date
10/24/2024
Chief Administrator Officer's Signed Date
10/25/2024
Subject:
Economic Development Revolving Loan Fund (EDLF) - HK Brewing Collective, LLC
Additional Staff Contact:
Peter Makowski; peter.makowski@slc.gov
Presenters/Staff Table
Roberta Reichgelt; roberta.reichgelt@slc.gov
Document Type*
Ordinance
Budget Impact*
Yes
No
Budget Impact:
$250,000 from the Economic Development Loan Fund
Recommendation:*
The EDLF Loan Committee recommends approval of a $250,000 loan to HK Brewing Collective, LLC.
Background/Discussion (?)
See attachment
Will the City Council need to hold a public hearing for this item?*
Yes
No
Public Process (?)
An OPMA compliant loan committee was held to review the loan application. The loan committee recommended for Council approval. Next steps are review and approval by Council.
Chief Administrator Officer's Comments
DEPARTMENT 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: October 22, 2024 Victoria Petro, Chair FROM: Lorena Riffo-Jenson, Director, Department of Economic Development SUBJECT: Economic Development Revolving Loan Fund (EDLF) – HK Brewing Collective, LLC STAFF CONTACTS: Roberta Reichgelt, Business Development Director: roberta.reichgelt@slc.gov Peter Makowski, Business Development Deputy Director: peter.makowski@slc.gov DOCUMENT TYPE: Ordinance
RECOMMENDATION: The EDLF Loan Committee recommends approval of a $250,000 loan to HK Brewing Collective, LLC. BUDGET IMPACT: $250,000 from the Economic Development Loan Fund BACKGROUND/DISCUSSION: On August 15th, 2024, a loan request from HK Brewing Collective,
LLC was presented to the EDLF Loan Committee for review and discussion. HK Brewing Collective, LLC is a dynamic business offering a unique brand of non-alcoholic kombucha, Han’s kombucha, and a vibrant taproom & bar experience. With a strong foundation in brewing and a commitment to quality, HK Brewing Collective is poised for growth, driven by a strategic marketing approach, a thriving taproom, and a recent contract for Han’s kombucha with United Natural Foods (UNFI). Basic Loan Request Business Name: HK Brewing Collective, LLC Address: 370 Aspen Salt Lake City, UT 84101 Loan Amount Requested: $250,000
Loan Term: 7 years Interest Rate: 8.50% Use of Funds: Equipment purchases, hiring staff and working capital
Loan Type: Expansion Council District: District 5
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 addition, 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,
• Encourage private investment,
• Promote economic development,
• Enhance neighborhood vitality,
• Boost commercial enterprise.
This loan will assist in the creation of 10 new jobs in the next year and retention of 20 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 September 30, 2024, the available EDLF fund balance is approximately $8.2 million. 2. As of October 1, 2024, the total amount of outstanding loans is: $3,932,436.60
EDLF Loan Committee
There is a total of nine (9) EDLF Committee members.
City Employees:
1. Community and Neighborhood’s 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: Ordinance and Terms Sheet
SALT LAKE CITY ORDINANCE No. _____ of 2024
(Ordinance approving a $250,000 loan for HK Brewing Collective, LLC at 370 Aspen Ave Salt Lake City UT 84101 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 $250,000 loan to HK Brewing Collective, LLC, a local business located at 370
Aspen Ave, Salt Lake City UT 84101.
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
October 21, 2024
LOAN TERM SHEET
Borrower: HK Brewing Collective, LLC
Address: 370 Aspen Ave
Salt Lake City, UT 84101
Proposed Loan Terms
Loan Amount: $250,000
Loan Terms: 7 Years
Interest Rate Calculation Prime Interest Rate: 8.5% at the time of application on 02/20/2024
Plus EDLF Charge: 4%
Less Discount: 1% for each
•Priority Area – State Street RDA Project Area
•SEDI – Socially and Economically Disadvantaged Individual
•Sustainability- E2 Business Program
•Low Income
Final Interest Rate: __8.5%__
Use of Funds: Funds will be allocated for equipment purchases, hiring staff and working capital.
Business Type: Expansion
Collateral: $52,400 – Equipment & Inventory
Personal Guarantees: Hannah Hendrickson; Kate Lubing
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.
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