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Home My WebLink AboutTransmittal - 11/14/2024SALT LAKE CITY TRANSMITTAL To: Salt Lake City Council Chair Start Date: 11/14/2024 Date Sent to Council: 11/21/2024 From: Employee Name: Wright, William E-mail william.wright@slc.gov Department Economic Development Department Director Signature Chief Administrator Officer's Signature* Director Signed Date 11/19/2024 Chief Administrator Officer's Signed Date 11/21/2024 Subject: Economic Development Revolving Loan Fund (EDLF) - Frontier Fruit, LLC Additional Staff Contact: Roberta Reichgelt, roberta.reichgelt@slc.gov Presenters/Staff Table Roberta Reichgelt, Business Development Director, Will Wright, Project Manager Document Type* Ordinance Budget Impact* Yes No Budget Impact: $350,000 from the Economic Development Loan Fund Recommendation:* The EDLF Loan Committee recommends approval of a $350,000 loan to Frontier Fruit, LLC Background/Discussion (?) On October 10, 2024, a $350,00 loan request from Frontier Fruit, LLC was presented to the EDLF Loan Committee for review and discussion. Frontier Fruit, LLC is a taproom offering an eclectic mix of renowned craft beers and artisanal spirits. Will the City Council need to hold a public hearing for this item?* Yes No Public Process (?) An OPMA compliant loan committee meeting was held to review the loan application. The loan committee recommended the loan 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: November 14, 2024 Victoria Petro, Chair FROM: Lorena Riffo-Jenson, Director, Department of Economic Development SUBJECT: Economic Development Revolving Loan Fund (EDLF) – Frontier Fruit, LLC STAFF CONTACTS: Roberta Reichgelt, Business Development Director, Roberta.Reichgelt@slc.gov Project Manager, Will Wright, William.Wright@slc.gov DOCUMENT TYPE: Ordinance RECOMMENDATION: The EDLF Loan Committee recommends approval of a $350,000 loan to Frontier Fruit, LLC. BUDGET IMPACT: $350,000 from the Economic Development Loan Fund BACKGROUND/DISCUSSION: On October 10, 2024, a loan request from Frontier Fruit, LLC was presented to the EDLF Loan Committee for review and discussion. Frontier Fruit, LLC is a taproom offering an eclectic mix of renowned craft beers, and artisanal spirits. Basic Loan request Business Name: Frontier Fruit, LLC Address: 1388 South 300 West, Salt Lake City, Utah 84115 Loan Amount Requested: $350,000 Loan Term: 7 years Interest Rate: 9.5% Use of Funds: Machinery & Equipment, Furniture & Fixtures, Leasehold Improvements, Contingencies Loan Type: Start-up, however, Loan Committee is recommending an exception based on owner Trent Fargher’s extensive experience owning and operating a taphouse. Council District: 5 Reasoning behind staff recommendation Applicants of The Economic Development Loan Fund (EDLF) go through a thorough application process consisting of pre-screening, underwriting analysis and an 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. • Stimulate business development and expansion, • Enhance neighborhood vitality, • Promotes economic development, • Boost commercial enterprise. This loan will assist in the creation of 19 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 of September 30, 2024, the EDLF available fund balance is approximately $8,200,000. 2. As of October 31, 2024, the total amount of outstanding loans is: $4,597,617.49 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: Ordinance EDLF Terms Sheet for Frontier Fruit, LLC SALT LAKE CITY ORDINANCE No. _____ of 2024 (Ordinance approving a $350,000 loan for Frontier Fruit, LLC, at 1388 South 300 West, Salt Lake City, Utah 84115 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 Frontier Fruit, LLC, a local business located at 1388 South 300 West, Salt Lake City, Utah 84115 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 30, 2024 LOAN TERM SHEET Applicant: Frontier Fruit, LLC Address: 1388 South 300 West, Salt Lake City, Utah 84115 Proposed Loan Terms Loan Amount: $350,000 Loan Terms: 7 Years Interest Rate Calculation Prime Interest Rate: 8.5% (at the time of application on March 20, 2024) Plus EDLF Charge: 4% Less Discount: 1% for each  Sustainability (SLC Green’s e2 Business Program)  Low to Moderate income business owner LMI  Priority Area (State Street RDA Project Area) Final Interest Rate: 9.5% Use of Funds: Machinery & Equipment, Furniture & Fixtures, Leasehold Improvements, Contingencies Business Type: Startup Business (Loan Committee approved expansion loan based on owner’s 15 years of experience in the industry.) Collateral: Real Property located at 435 Aspen Drive #19, Park City, Utah 84098 Personal Guarantees: Trent Fargher 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. This page has intentionally been left blank