by Jim Boyle
Three companies are poised to pump more than $8 million in private sector investment in Elk River with the help of a new forgivable loan program.
Two of the businesses plan to expand their operations in Elk River, and third is preparing to move from Rogers and hopes to become the first industrial business to locate in the city-owned Nature’s Edge Business Center.
The Elk River City Council will host a public hearing and take final action on the loan application at its May 6 meeting. The Elk River Economic Development Commission has already reviewed the application and gave its support for the requests from Alliance Machine, Orluck Industries and Preferred Powder Coating.
EDA Chair Dan Tviete said the loans are a great example of supporting existing businesses and luring new business to spur economic development.
Each business is asking for a $200,000 loan at 3 percent interest, a 10-year term and fully amortized over 20 years. The loans will be forgiven if the businesses make good on their promises, which include delivering at least six new jobs offering wages and benefits totaling $12.19 an hour. The applicants will have a minimum of two years hire these jobs, and they must be retained for a minimum of one year.
The city has a forgivable loan fund balance of $703,679 after a pair of businesses paid back their loans from 2000. City of Elk River officials learned they need to give these dollars to a 501(c)(3), repurpose them or give them back to the state. And until they did something with them, they would not be able to apply for more grants.
“We decided to releverage these dollars,” said Clay Wilfahrt, the assistant director of economic development. “It’s really rather exciting. The city hasn’t seen anything of this magnitude for four, five years.”
Orluck Industries plans to invest $1.2 million to fund a 12,000-square-foot expansion to its 25,000-square-foot expansion at its Elk River facility.
Alliance Machine plans to invest $1.4 million to fund an 18,000-square-foot expansion of its 24,000-square-foot facility in the city-developed Northstar Business Park. The expansion will provide more space for shipping and receiving to build mass production capacity.
Preferred Powder Coating of Rogers is looking to induce $5.4 million in private investment to construct a 70,000-square-foot facility in the city-owned Natures Edge Business Park. The firm expects to add between eight to 10 jobs to its current list of 24 positions.
The reason for the burst of activity from this loan program is an initial application period that ran from Feb. 15 through March 15.
The forgivable loan program was established to stimulate private sector investment, to help spur new construction and to create and retain employment opportunities in addition to promoting the sale of city-owned property.
City staff received three applications, and worked all three up. If all three are granted, there will still be about $100,000 left to loan out.
Once all this money is spoken for, the city of Elk River will be eligible to apply for more state and federal funds.