EDA Meeting Date: July 22, 2024
To: Members of the Economic Development Authority
From: Nate Carlson, Economic Development Coordinator
Title
EDA Revolving Loan Application - KYMN Radio
Body
Action Requested:
The EDA Board shall make a motion to approve the attached EDA Resolution.
Summary Report:
R.R. Larson & Associates, LLC d.b.a KYMN Radio is requesting a $50,000 Loan from the EDA City-Wide Revolving Loan Program. The applicant has provided an application for the funds, which can be found attached to this report. Mr. Rich Larson introduced their project to EDA staff in Winter 2023. Staff and the applicant worked to refine the project and complete the application to EDA Board standards. This application was provided to staff on April 30, 2024. Staff has reviewed the loan application thoroughly and has identified that this application meets all loan criteria.
KYMN Radio has been in operation for over 55 years. The station is a single, independent broadcasting company that offers a mix of news, talk, sports and music, with localized programs focused on such disparate subjects as the Northfield business community and the local arts community. The current owner and operator, Mr. Jeff Johnson, has indicated his desire to retire at the end of this year and sell the company. Mr. Larson having been a critical operations manager for the station is proposing to buy the company from Mr. Johnson. In order to do so, Mr. Larson is seeking assistance with leveraging debt from multiple sources.
Mr. Larson is working through the loan underwriting process with Merchant’s Bank as well as the EDA’s business partner, MCCD. There is an additional source of funds that will be seller financed as well for this acquisition to take place.
Attached to this report are the necessary documents for EDA Board review:
• Completed Application
• Funding Sources and Uses Table
• Revolving Loan Criteria
The EDA Loan Committee met on May 31, 2024 to review the application and discuss a recommendation to the EDA Board. The Committee provided a recommendation to the EDA Board approving the loan according to the following terms:
• Loan Amount: $50,000
• Loan Terms: 10 years
• Loan Amortization Requested: 20 years
• Loan Interest Rate proposed: 4.5%
• Two years of interest only payments: $187.50
• Monthly Payments of P/I after year two: $316.32
• Balloon payment at end of year 10: $35,146.87
• Collateral Offered: 3rd Lien Position on Mortgage of radio tower and 10 acres farmland
Alternative Options:
Deny the request and state the reasons for denial.
Financial Impacts:
The EDA does not limit the funds for revolving loan applications. The entire fund balance of Fund 292 is available for use. The current balance available, as of June 30, 2024, reserved for revolving loans within EDA Fund 292 was $ 1,324,298.57, which is the total unreserved fund balance.
Tentative Timelines:
EDA Action on Loan request - July 22, 2024
Underwriting with MCCD and Merchants - July - September 2024
Closing on acquisition - September 2024