PUBLIC HEARING - ECONOMIC DEVELOPMENT AUTHORITY - Erik Thorvig, Community Development Director
Title
GENERAL PATTERN COMPANY MINNESOTA INVESTMENT FUND (MIF) LOAN EXTENSION
Background
General Pattern Company (GPC) is a family owned single source solution for plastic part manufacturing including design, prototyping, tooling and forming of plastic parts. GPC been operating in Minnesota for over 95 years and has operated for the last 34 years from its sprawling 200,000 square foot campus in the City of Blaine in the Northstar Industrial Park just south of 85th Avenue near 35W. GPC also has a 55,000 square foot site off of Radisson Road, north of 109th Avenue.
In 2017, GPC received a Minnesota Investment Fund (MIF) loan from the state of Minnesota in the amount of $450,000. The MIF provides financing to help add new workers and retain high-quality jobs on a statewide basis in manufacturing, and technology-related industries. The MIF loan application is prepared and submitted by city staff and funds are awarded to the local unit of government (EDA) who provide the loan to the eligible business. Therefore, the City acts as a pass through and administrator for the loan however there is no financial risk to the City if the loan defaults. The company is current on loan payments.
The loan allowed GPC to fund an expansion project that included purchase of a 28,800-sf. building at 3100 84th Lane for $1,750,000; purchase of new machinery and software for $1,195,000 and $538,000 in renovations to the purchased building for a project total of $3,483,000. The acquisition of the building and other expenses has occurred over the last two years.
At the time of the agreement being executed, the company had 108 employees. The loan agreement required the company to hire 30 employees at various wages by 12/1/2020. The company provided annual reports in 2018 and 2019 and were on pace to exceed the hiring requirements. Unfortunately, due to the economic circumstances occurring in 2020, the company isn’t able to meet the staffing requirements by the required 12/1/2020 deadline. The company is requesting a one-year extension through 12/1/2021.
The company is confident they will be able to meet the employment requirements. If the company is not able to meet the employment requirements by the compliance date, all loan funds must be returned to the State of Minnesota.
Recommendation
Approve the attached Resolution.
Body
WHEREAS, the Blaine Economic Development Authority acted as the legal sponsor for the project contained in the Minnesota Investment Fund Program for the project entitled General Pattern Expansion; and
WHEREAS, that the Blaine Economic Development Authority has the legal authority to amend the Grant Contract dated December 11, 2017 between the General Pattern Company and the State of Minnesota acting through the Department of Employment and Economic Development; and
WHEREAS, that the Blaine Economic Development Authority has held a public hearing for the purpose of accepting comments for the purpose to amend the Grant Contract in compliance with the Minnesota Business Subsidy Law to extend the term of the Grant Contract; and
WHEREAS, that the Blaine Economic Development Authority has held a public hearing for the purpose of accepting comments for the purpose to amend the Loan Agreement between the Blaine Economic Development Authority and State of Minnesota; and
WHEREAS, that General Pattern Company has requested a one-year extension of the contract from December 1, 2020 to December 1, 2021.
NOW, THEREFORE BE IT RESOLVED that the Blaine Economic Development Authority authorizes to execute an amendment to the Grant Contract dated December 11, 2017 between the Blaine Economic Development Authority and the State of Minnesota acting through the Department of Employment and Economic Development, extending the term of the contract to December 1, 2021; and
BE IT FURTHER RESOLVED that the Blaine Economic Development Authority authorizes to execute an amendment to the Loan Agreement between the Blaine Economic Development Authority and General Pattern Company; and
BE IT FURTHER RESOLVED that the President and Executive Director, or their successors in office, are hereby authorized to execute the amendment thereto, as is necessary to implement the project on behalf of the Blaine Economic Development Authority.
PASSED BY THE Blaine Economic Development Authority this 7th day of December, 2020.