by Joni Astrup
Sportech will be adding a Customer Innovation Center to its operation, thanks in part to a city loan.
The Elk River City Council voted unanimously Monday to approve a $111,155 forgivable loan for the business, which produces aftermarket products for sporting vehicles. Sportech will use the money to help construct a 6,210-square-foot Customer Innovation Center in the upper level of the Sportech building at 10800 175th Ave. in Elk River. The company anticipates adding six to eight design engineers in 2014 and 2015, according to Elk River Economic Development Director Brian Beeman.
The loan, which carries an interest rate of 3 percent, will be forgiven upon Sportech meeting the goals and requirements of the loan program. Beeman said the city’s policy calls for one new job to be created per $25,000 of assistance, which in this case would mean at least 4.5 new jobs. “We haven’t negotiated the closing documents, but if both parties agree, we are anticipating about five to six new full-time jobs to be created,” he said.
The total project cost of the Customer Innovation Center is $263,088.
Meanwhile, with the approval of the Sportech loan, the balance in a city loan fund is zero, Beeman said.
Last year, the city had a forgivable loan fund balance of about $700,000 after a pair of businesses paid back their loans from 2000. The city was required to give those 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.
In 2013 the city approved three loans of $200,000 each under the program to Orluck Industries, Alliance Machine and Preferred Powder Coating.