DATE: October 26, 2017
TO: Members of the Economic Development Authority
FROM: Nate Carlson, Economic Development Coordinator
Chris Heineman, Community Development Director
Title
EDA Consideration of Resolution #2017-02 Third Loan Modification for StrataPoint
Body
SUMMARY AND ACTION REQUESTED:
EDA Board shall review EDA Loan Sub-Committee recommendation and approve resolution #2017-02 to approve Third Loan Modification for StrataPoint Master Development Loan.
BACKGROUND:
In 2009, the EDA recommended that City Council approve a Master Development Loan of $50,000 to StrataPoint, Inc. at a rate of 3.25% (WSJ Prime as of loan start date) amortized over 60 months (Resolution #2009-041). The company made timely payments through April 30,, 2013. However, the company experienced financial hardships and notified its creditors that further payments on their financial obligations would not be feasible, and they requested alternate payment arrangements.
With a balance of $14,999.75, the EDA passed Resolution #2013-08 on April 25, 2013 requesting the City Council modify the loan arrangement to interest-only payments for a 24-month period. Council approved the modification stating StrataPoint, Inc. was granted 24 months of interest-only payments at a rate of 3.625% of the outstanding balance, which correlated to $46 monthly payments. This first modification ended on May 7, 2015.
Following the end of the first modification in 2015, staff presented a second modification of the loan in April 2015 to the EDA Board extending the interest-only payments for an additional two years. The EDA Board approved the amendment and provided recommendation to Council. City Council also approved the second modification (Resolution #2015-075). This second modification ended July 2017.
After correspondence with StrataPoint, Inc. leadership, staff has concluded that the company continues to experience financial hardship. Rather than extend the interest-only payments an addition...
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