HomeMy WebLinkAboutCouncil Provided Information - 6/3/2025CITY COUNCIL OF SALT LAKE CITY
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COUNCIL STAFF REPORT
CITY COUNCIL of SALT LAKE CITY
TO:City Council Members
FROM: Austin Kimmel
DATE:June 3, 2025
RE: ORDINANCE: ECONOMIC DEVELOPMENT LOAN FUND LOAN TO HRUSKAS, LLC, AT
1751 SOUTH 1100 EAST
ISSUE AT-A-GLANCE
$200,000 loan at an 11% interest rate over seven
years. This loan will assist in the creation of two new jobs in the next year and the retention of nine existing
ones. Funds will also pay for Renovation, Working Capital, Equipment, Furniture and Fixtures.
Goal of the briefing: Review a proposed $200,000 loan from the Economic Development Loan Fund to
Hruskas, LLC, before taking action during the June 3 formal meeting.
POLICY QUESTIONS
Item Schedule:
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to others. For example, are risk factors evaluated for each company, like outstanding loans, years in
business, etc.?
3.What outreach does the Department do to ensure a diverse pool of businesses successfully applies to the
EDLF? Are applications from diverse owners, particularly those whose businesses are located on the
Westside, offered additional support through the application process? Does EDLF staff have ideas for
improving access that would benefit from program changes or additional funding?
4. The Council may wish to request a more general update on EDLF use and processes. This could include the
number of applications, review criteria used, loan program goals, etc.
ADDITIONAL AND BACKGROUND INFORMATION
A.Interest Rates. For context, the nationwide median rates for urban small business commercial and
industrial loans in the second quarter of 2024 (the most recent data available) were 7.77% for fixed-rate
loans and 8.88% for variable rate loans, according to the most recent U.S. Federal Reserve Small Business
Lending Survey*. In the second quarter of 2022, these rates were 4.50% and 5.55% respectively. Interest
rates for EDLF loans consider an assessment of the risk level of different applicants, among other factors,
and include potential interest rate reductions. Interest rates have ranged from 7.25% for nearly all 2022
EDLF loans to an average of 9.55% in 2023 and 2024.
*Source: Small Business Lending Survey, New Small Business Lending Declines as Credit Standards
Continue to Tighten. Consulted on May 16, 2025, at https://www.kansascityfed.org/surveys/small-
business-lending-survey/new-small-business-lending-declines-as-credit-standards-continue-to-
tighten/.
B.Interest Rate Reductions. The bases for potential reductions are as follows:
1.Location within a priority area: RDA Project Area; Opportunity Zone; West of I-15; or
Neighborhood Business Improvement Program (NBIP, previously known as Façade Improvement)
target area.
2.Socially and Economically Disadvantaged Individuals (SEDI)-Owned Businesses: 51%
of the business is owned by at least one SEDI individual.
3.Low Income Business Owner: Income does not exceed 80% of Salt Lake County average
median income (AMI) as defined by the U.S. Department of Housing and Urban Development
(HUD).
4.Sustainability: Either,
a. Membership in SLC Green’s E2 Business Program; or
b. Loan proceeds will be used for the purchase of electric vehicles, electric vehicle charging
stations and infrastructure, renewable energy including but not limited to wind and solar, heat
pumps, high efficiency equipment, and/or energy efficiency.
The interest rate reductions applied to this application are detailed below:
Hruskas, LLC
8.0% prime rate
+ 4% ELDF charge
– 1% for sustainability
___________________________
11.0% final interest rate
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C.Program. The EDLF is administered by the Department of Economic Development, which is charged with
maintaining the corpus of the EDLF in a manner sufficient to perpetuate the program's goals. Each loan
application is pre-screened, and an underwriting analysis and economic impact statement are completed
before an application may be recommended for Loan Committee (see below) review. Information on
successful applications is transmitted to the Council to consider for final approval.
Available balance and amount of outstanding loans. The Department reported that the Fund’s
available balance was approximately $7,300,000 on April 22, 2025, and outstanding loans totaled
$5,651,017.20.
EDLF Committee Membership. The Department of Economic Development lists nine members of the
EDLF Committee as follows:
City Employees Community Volunteers