The Tracy EDA on Wednesday passed a motion to act as legal sponsor on a project and loan application for a $250,000 loan from the Department of Employment and Economic Development for a roughly $1.5 million project Iterro is planning for the former Salmon building (most recently Chasing Our Tails) on 4th St.
The loan would be secured with new equipment, on a seven-year, 1% interest loan through the Minnesota Investment Fund (MIF). The City of Tracy would retain 40% of principal and interest payments, not to exceed $100,000, which will be committed in a new EDA Revolving Loan Fund.
These funds can then be used for future business expansion projects.
The city council will hold a public hearing Monday, April 14, as part of its regular meeting.
Iterro, formerly known as tru Shrimp, asked the City if it would serve as the sponsor on a loan application to DEED through the MIF program alone fund.
“This is something that’s not offered directly to corporations, it’s offered through an independent — a city, county or EDA — to apply for this loan on behalf of the applicant,” said Tracy Community Development Director Tom Dobson. “In this case, we would be applying for Iterro to put a dog treat manufacturing facility there. The council would have to approve the application being sent to the State of Minnesota.”
In exchange for serving the loan, the City would receive the 40% of the principal and interest payment, up to $100,000 over the course of the loan.
“What that does is it begins a revolving loan fund, and that was the purpose of the State putting this Minnesota Investment Fund together,” Dobson said. “They help establish projects that would normally not have qualified for standard bank financing."
The building on 4th St. had been previously updated and retrofitted for Chasing Our Tails, which manufactured pet treats there — the same thing Iterro tentatively plans to do with its shrimp by-products.
Iterro purchased the building on auction, not knowing exactly what they might do with it, according to Dobson. Initially, they thought it would be used for cold storage.
“That’s important for our application … this has to be a new project; it can’t be something that they already determined what they were going to do,” Dobson said. “It has be to through the State of Minnesota a ‘but for’ test — but for this lending ability, this would not happen.”
In other business …
• Dobson informed the EDA board that the Thee Old Bank building has been sold.
• Dobson will reach out to two businesses to get bids on the replacement water softeners for Orchard Lane when needed.
