Genuine Genius Solutions Financial EVA ApplicationTHE CITY OF
DuB E MEMORANDUM
~-~~
May 1, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Application for Financial Assistance for Genuine Genius Solutions, LLC
Economic Development Director David Heiar is recommending submission of an
Entrepreneurial Ventures Assistance (EVA) program application to the Iowa Department
of Economic Development on behalf of Genuine Genius Solutions, LLC.
Genuine Genius Solutions is an idea architecture firm that targets specific industries.
They have an impressive list of Fortune 500 Company customers. Genuine Genius
Solutions is currently located in Minneapolis, Minnesota, and intends to move to
Dubuque, expanding their company with a commitment to have 13 employees in
Dubuque averaging over $45,000, plus benefits, in the first year.
The $200,000 EVA loan application with a $25,000 technical assistance grant requires a
local match. The City would provide a $40,000 Community Development Block Grant
loan. Brian Dalziel of the Northeast Iowa Business Accelerator is seeking local
investors to provide $300,000 in financial assistance.
The company is looking to move into the Northeast Iowa Community College (NICC)
downtown facility in June 2007. The initial space will be 1,000 square feet, expandable
to 3,000 square feet in six to nine months. The company will then begin to look for a
permanent facility on a lease or lease-to-own basis with expected square footage of
10,000 square feet in three years.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
~'~ /~
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
April 20, 2007
TO: Michael Van Milligen, City Manager
FROM: David Heiar, Economic Development Director
SUBJECT: Application for Financial Assistance for Genuine Genius Solutions, LLC
INTRODUCTION
This memorandum presents for City Council review and approval a resolution
authorizing the submission of an EVA (Entrepreneurial Ventures Assistance) program
application to the Iowa Department of Economic Development on behalf of Genuine
Genius Solutions, LLC, an idea architecture firm that targets specific interests. The
Entrepreneurial Ventures Assistance (EVA) application is attached.
BACKGROUND
This project was brought to the City of Dubuque by Karen Adams with Prosperity
Eastern Iowa. This is a direct result of our resent efforts at regional economic
development. Company representatives have been in Dubuque on three occasions and
have been assisted by Prosperity Eastern Iowa, GDDC, the Northeast Iowa Business
Accelerator (Brian Dalziel), NICC, and City staff.
Genuine Genius Solutions, LLC has announced its intent to relocate its operations in
downtown Dubuque. The Company, which is currently located in Minneapolis, will
create 13 new positions in Dubuque as a part of this relocation and expansion process.
Genuine Genius Solutions, LLC is an idea architecture firm that targets specific
industries. The Company identifies, protects and designs reusable tools into marketable
solutions delivered via a channel marketing strategy in conjunction with Circle Partners,
who are established companies with specific expertise that have shared risk and
aligned financial goals.
The initial channel, VerticalT"" has built an impressive set of Fortune 500 customers
over the past three years which includes Hewlett Packard, EMC, Marmon Group and
Thomson Companies. Open Road®, the Company's second channel, provides a
complete automotive dealer technology solution. Open Road® has released its first
product, Open Road CRM powered by Car IT, an international software partner
(www.audev.com).
Genuine Genius leverages technology to coordinate critical resources at strategic
business partners from around the world to power their product channels. Using a
shared reward model provides partners with recurring revenue and a steady stream of
new products in return for their market expertise, human capital, established customer
channels and capital infrastructure. Investors in Genuine Genius benefit from a
diversified revenue stream that requires less capital for growth with minimal downside
risk.
The Company principals have over 18 years of experience creating and improving
businesses in several industries. These experiences range from start up experience at
the Bucket Boss Company which created, branded and promoted an entirely new
consumer product line that grew from zero to $20 million in annual revenue in six years
to large scale business solutions for companies such as Xcel Energy, Oshkosh Truck
and Hewlett Packard. The Company's collective experience has created a superb
network of inventors, engineers, artists, scientists and generally creative folks that
create a vibrant energy that is critical to maintaining a steady flow of new ideas. These
people are Genuine Genius.
The company has spent much of its time, and profits, on developing its core technology
for the Open Road Vertical. Near the end of 2006, this project was completed and sales
have commenced. Coupled with their other verticals, Consumer Product and Vertical,
the company needs to expand its sales, technical support and application development
employment base. The company began exploring communities for expansion
throughout the Midwest in February 2007. The stated goal is to have a community
chosen and a relocation package established in June of 2007.
The company is looking to move into the Northeast Iowa Community College (NICC)
downtown facility in June 2007. The initial space will be 1,000 sq ft, expandable to
3,000 sq ft in 6-9 months. The company will then begin to look for a permanent facility
on a lease or lease-to-own basis with expected sq footage of 10,000 sq ft in 3 years.
An EVA application will provide additional financial assistance to enable the company to
relocate and expand in Dubuque. The application to the Iowa Department of Economic
Development requires a commitment of City funds to the project. A proposed $40,000
CDBG loan would meet this local match requirement. An Enterprise Zone application is
also being considered pending the permanent location site.
DISCUSSION
Genuine Genius Solutions, LLC will commit to employ 13 new employees in Dubuque
averaging over $45,000 plus benefits in the first year. The Company will be seeking
$300,000 from a Local Angel Investor. Brian Dalziel with the Northeast Iowa Business
Accelerator is seeking and coordinating local equity investors to meet this financing
need.
To assist this project, Genuine Genius Solutions, LLC has requested an EVA loan of
$200,000 and a technical assistance grant of $25,000. City assistance as public match
for the EVA application is proposed to be a $40,000 CDBG low interest loan. The loan
would be a five year 0% interest loan with principal payments beginning in year 2.
RECOMMENDATION
I recommend that the City Council authorize the submission of an EVA application for a
$200,000 loan and a $25,000 technology grant on behalf of Genuine Genius Solutions,
LLC with a commitment of local matching funds.
This project is consistent with the City's goals to help businesses locate and expand in
the community, increase the number of good paying jobs and further diversify our
economic base.
ACTION STEP
The action step for the City Council is to adopt the attached resolution.
attachments
F:\USERS\DHeiar\Genuine Genius Solutions\Financial Assistance App Memo.doc
RESOLUTION NO. 271-07
A RESOLUTION AUTHORIZING THE FILING OF AN ENTREPRENEURIAL
VENTURES ASSISTANCE (EVAj APPLICATION ON BEHALF OF GENUINE
GENIUS SOLUTIONS, LLC
Whereas, Genuine Genius Solutions, LLC has proposed to relocate and expand
its operation to Dubuque; and
Whereas, the City Council of Dubuque, Iowa has considered said proposal and
has determined that the proposed project will contribute to the local economy through
the creation of 13 new jobs in the first year for area residents; and
Whereas, the Iowa Department of Economic Development's Entrepreneurial
Ventures Assistance (EVA) was designed to assist in the economic development efforts
of local jurisdictions; and
Whereas, the City of Dubuque, Iowa is eligible to apply for funding from the
Entrepreneurial Ventures Assistance (EVA) program;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the filing of an application for participation in the Iowa
Entrepreneurial Ventures Assistance (EVA) program on behalf of Genuine Genius
Solutions, LLC is approved.
Section 2. That the local match as identified in the application is hereby approved,
subject to the EVA application approval.
Section 3. That the Mayor is hereby authorized to execute, and the City Manager is
hereby directed to submit said application to the State of Iowa Economic Development
Commission together with such documents as may be required.
Passed, approved, and adopted this 7th day of May,
Roy D.~uol, Mayor
Attest
Jeanne Schneider, City Clerk
F:IUSERS\DHeiarlGenuine Genius Solutions\Resolution approving EVA app.doc
April 19, 2407
Laura Stein
Program Manager
Entrepreneurial Venture Assistance Program
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, IA 50309-1819
Dear Ms. Stein:
13ui{Ciro; Cr;rnriur;
'Nea6th. & Emnlo~mc
[ am writing to express my support for Genuine Genius Solutions, LLC (GGS), a
Minnesota company looking to relocate to, and subsequently expand in,
Dubuque, Iowa. As I understand their needs, they are applying to the Iowa
Department of Economic- Development for an entrepreneurial Venture
Assistance technical assistance grant in the_ amount of $25,000 and an
Entrepreneurial Venture Assistance Loan of $200,000•
if this project receives IDED approval, Northeast Iowa Community College will be
committing $158,499 of 260E job training funds to this project and the City of
Dubuque will be participating with $40,004 through its revolving loan fund. I am
working with Rob Daniels, GGS founder, to secure $300,000 in local equity
participation from the Dubuque business community.
took the opportunity to meet twice with Mr. Daniels. 1 have reviewed his growth
plan in detail, have challenged him on his revenue assump#ions, understand his
competitive advantage and am confident in his success.
GGS focuses on vertically-integrated technology solutions for markets with which
it enjoys inside understanding of wants and needs. Open Road is the strongest
product offering developed by GGS. A complete turnkey solution for the $2 billion
automotive dealerships channel, Open Road was integrated by GGS utilizing
bes#-in-class component technologies exclusively licensed from GGS technology
partners. This solution was completed fall 2006, was deployed an automotive
dealership early 2007 and has received high marks for user satisfaction and
overall effectiveness. GGS is leveraging this success with a second installation
that will take place in May 2007.
Based on open Road's broad commercial potential, I am writing to reques# that
Iowa Department of Economic Development award to Genuine Genius Solutions
an EVA technical assis#ance grant of $25,000 and an EVA loan of $200,000.
Please feet free to contact me at 563.557.8271 ext. 250 with your questions.
Thank you for your #houghtful consideration of this important opportunity.
B/es~t personal regards,
~~..-~.-~%.a~i
Brian Dalziel
Regional Director, Northeast Iowa Business Accelerator
Bc~sir~~ss R+
. r:apT}~~R„ !vv
Tpvan CIOCk Center for Professional Development - 680 Main Street - Dubuque, Iowa 52001
;3.551.8271 EXi: 250. (:563.557.0319 _ •,vurw.BusAccel.org
IOWA
,~f~ ~~°~ c~artg~n~
Michael Tramontma, Interim Director
Iowa Department of Economic Development
Application for Financial Assistance
Section A -Applicant & Project Information
Business Development Division
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, Iowa 50309
www.iowalifechan~ inq.com
January 22, 2007
Instructions
1. All applicants shall complete Section A of the Application for Financial Assistance and attach o~ those section(s) for the
program(s) to which the applicant is applying.
Program Download and Complete
Community Economic Bettermeant Account (CEBA) Section B
Enterprise Zone Program (EZ) Section C
High Quality Job Creation Program (HQJC) Section D
Entrepreneurial Ventures Assistance Program (EVA) Section E
Value Added Agricultural Products & Processes
Financial Assistance Program (VAAPFAP) Section F
Economic Development Set-Aside Program (EDSA) Section G
2. Please visit the IDED Web site, http://www.iowalifechanging.com/applications/bus dev/index.html or contact IDED at (515)
242-4819 to see if this version of the application is still current.
3. Before filling out this application form, please read all applicable sections of the 2005 Iowa Code and Iowa Administrative
Code (rules). http://www4.legis.state.ia.us/IAChtml/261.htm
4. Only tyged orcomputer-generated applications will be accepted and reviewed. Any material change to the fomtaf,
questions, or wording of questions presented in Phis application, will render the application invalid and it will not be
accepted.
5. Complete the applicable sections of the application fully; if questions are left unanswered or required attachments are not
submitted, an explanation must be included.
6. Use clear and concise language. Attachments should only be used when requested or as supporting documentation.
7. Any inaccurate information of a significant nature may disqualify the application from consideration.
8. Upon completion of the application, please submit the following to the Business Finance Team at IDED:
• The original, signed application form and all required attachments
• One copy of the application form and all required attachments from which additional copies can easily be made.
If electronic copies of the application and required attachments are available, please a-mail these documents to
businessfinancena.iowalifechanging.com in addition to submitting the original plus one copy.
Business Finance Team
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines IA 50309
Application Due Dates
IDED Board Meetin A lication Due Date
A ril 19, 2007 March 26, 2007
Ma 17, 2007 Aril 23, 2007
June 13, 2007 Ma 21, 2007
Jul 19, 2007 June 25, 2007
Au ust 16, 2007 Jul 23, 2007
Se tember 20, 2007 Au ust 27, 2007
October 18, 2007 Se tember 24, 2007
November 15, 2007 October 22, 2007
December 20, 2007 November 26, 2007
"EVA applications will be acted upon every other month starting in March.
Section A -Applicant & Project Information
Public Records Policies
Information Submitted to IDED. The Iowa Department of Economic Development (IDED) is subject to the Open Records law
(Iowa Code, Chapter 22). Treatment of information submitted to IDED in this application is governed by the provisions of the
Open Records law. All public records are available for public inspection. Some public records are considered confidential and
will not be disclosed to the public unless ordered by a court, the lawful custodian of the record, or by another person duly
authorized to release the information.
Confidential Records. IDED automatically treats the following records as confidential and they are withheld from public
disclosure:
• Tax Records
• Quarterly Iowa Employer's Confribufion and Payroll Reporf prepared for the Iowa Workforce Development Department
• Payroll Registers
• Business Financial Statements and Projections
• Personal Financial Statements
Other information supplied to IDED as part of this application may be treated as confidential under Iowa Code section 22.7.
Following are the classifications of records which are recognized as confidential under Iowa law and which are most frequently
applicable to business information submitted to IDED:
• Trade secrets [Iowa Code §22.7(3)]
• Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose.
[Iowa Code §22.7(6)]
• Information on an industrial prospect with which the IDED is currently negotiating. [Iowa Code §22.7(8))
• Communications not required by law, rule or regulation made to IDED by persons outside the government to the extent that
IDED could reasonably believe that those persons would be discouraged from making them to the Department if they were
made available for general public examination. [Iowa Code §22.7(18)]
Information supplied to IDED as part of this application that is material to the application andlor the state program to
which the applicant is applying including, but not limited to the number and type of jobs to be created, wages for those
jobs, employee benefit information, and project budget, are considered open records and will not be treated as
confidential.
Additional Information Available. Copies of Iowa's Open Record law and IDED's administrative rules relating to public
records are available from the Department upon request or at
http://www. iowalifechanginq.com/downloadslchap169openrecords.doc.
Section A -Applicant & Project Information 3
Applicant Information
1. Name of Business: Genuine Genius Solutions, LLC
Address: 100 West Franklin Avenue
City, State & Zip Code: Minneapolis, MN 55403
Contact Person: Rob Daniels Title: President
Phone: 612-605-5353 Email: rdaniels@genuinegenius.com
2. SIC or NAICS Code: NAICS 541512
3. Federal ID Number: 20-0020353
Does the Business file a consolidated tax return under a different tax ID number? ^ Yes X No
If yes, please also provide that tax ID number:
4. Is the contact person listed above authorized to obligate the Business? X Yes ^No
If no, please provide the name and title of a company officer authorized to obligate the Business:
5. If the application was prepared by someone other than the contact person listed above, please complete the following:
Name: Title:
Organization:
Address:
City, State, & ZIP Code:
Phone: Fax: Email:
Sponsor Information
Please review the following table to determine who needs to sponsor this application. Depending on the programs being
applied for, more than one sponsor may be necessary.
Pro ram Acce table Sponsor
CEBA Ci or Count or Communit Colle a in which the Project Site is Located
EZ Local Enter rise Zone Commission
HQJC Ci or Coun in which the Project Site is Located
EVA City or County in which the Project Site is Located; Local Development Entity; John Pappajohn Entrepreneurial
Center; a Small Business Develo ment Center; Business Accelerator; or similar entit
VAAPFAP Cit or Coun in which the Project Site is Located or Local Develo ment Entit
EDSA Cit or Coun in which the Project Site is Located
1. Sponsor Organization: City of Dubuque
Official Contact (e.g. Mayor, Chairperson, etc.): Roy D. Buol Title: Mayor
Address: 50 West 13~ Street
City, State & ZIP Code: Dubuque, IA 52001
Phone:563-589-4110 Fax:563-589-4149 E-mail:
2. If IDED needs to contact the sponsor organization with questions, should we contact the person listed above?
^ Yes X No, please contact the following person:
Name: David J. Heiar Title: Economic Development Director
Address: 50 West 13~" Street
City, State & ZIP Code: Dubuque, IA 52001
Phone: 563-589-4393 Fax: 563-589-1733 E-mail: dheiar@cityofdubuque.org
If necessary, please list information on additional sponsors in an attachment.
Section A -Applicant & Project Information 4
Certification & Release of Information
I hereby give permission to the Iowa Department of Economic Development (IDED) to research the Business' history, make
credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities necessary for
reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IDED state tax
information pertinent to the Business' state income tax, sales and use tax, and state tax credits claimed.
I understand that all information submitted to IDED related to this application is subject to Iowa's Open Record Law (Iowa Code,
Chapter 22).
I understand this application is subject to final approval by IDED and the Project may not be initiated until final approval is
secured. (High Quality Job Creation Program applications may be submitted up to 12 months following the completion of the
project.)
I understand that IDED reserves the right to negotiate the financial assistance. Furthermore, I am aware that financial
assistance is not available until an agreement is executed within a reasonable time period following approval.
I hereby certify that all representations, warranties, or statements made or furnished to IDED in connection with this application
are true and correct in all material respect. I understand that it is a criminal violation under Iowa law to engage in deception and
knowingly make, or cause to be made, directly or indirectly, a false statement in writing for the purpose of procuring economic
development assistance from a state agency or subdivision.
For the Business:
Signature Date
Rob Daniels, President
For the Sponsor(s):
Signature Date
Name and Title (typed or printed)
Please use fhe following if more than one sponsor is required. (For example, use this if a signature from fhe local Enterprise
Zone Commission is required in addition fo the signature from the Mayor of the sponsoring city.)
Signature Date
Name and Title (typed or printed)
IDED will not provide assistance in situations where it is determined that any representation, warranty, or statement made in
connection with this application is incorrect, false, misleading or erroneous in any material respect. If assistance has already
been provided prior to discovery of the incorrect, false, or misleading representation, IDED may initiate legal action to recover
incentives and assistance awarded to the Business.
Section A -Applicant & Project Information
Project Information
Provide a brief description and history of the Business. Include information about the Business' products or services
and its markets and/or customers.
Genuine Genius Solutions, LLC is an idea architecture firm that targets specific industries. The Company identifies,
protects and designs reusable tools into marketable solutions delivered via a channel marketing strategy in
conjunction with our Circle Partners, who are established companies with specific expertise that have shared risk
and aligned financial goals.
Our initial channel, VerticalT"" has built an impressive set of Fortune 500 customers over the past three years which
includes Hewlett Packard, EMC, Marmon Group and Thomson Companies. Open Road, our second channel,
provides a complete automotive dealer technology solution. Open Road® has released its first product, Open
Road CRM powered by Car IT, an international software partner (www.audev.com).
The company has used the profits from Vertical to develop the software platform for Open Road. It is this product,
Open Road, that is now ready for full market deployment. In order to successfully market, sell, implement and
service the product line's customers, the company is needing to expand operations. As mentioned, a successful
implementation took place in late 2006 and a few are slated for the first half of 2007, though the company will need
to expand its employment base to facilitate a full rollout.
Our management team combines over 18 years of experience creating and improving businesses in several
industries. These experiences range from start up experience at the Bucket Boss Company which created,
branded and promoted an entirely new consumer product line that grew from zero to $20 million in annual revenue
in six years to large scale business solutions for companies such as Xcel Energy, Oshkosh Truck and Hewlett
Packard. Our collective experience has created a superb network of inventors, engineers, artists, scientists and
generally creative folks that create a vibrant energy that is critical to maintaining a steady flow of new ideas...these
people are Genuine Genius.
2. Business Structure:
^ Cooperative ^ Corporation X Limited Liability Company ^ Not for Profit
^ Partnership ^ S-Corporation ^ Sole Proprietorship
State of Incorporation: Minnesota
3.
4.
5.
Identify the Business' owners.
Rob Daniels, President - 74.6%
Paul Maire - 15%
Employee Management - 10.4%
5 employees
Does a woman, minority, or person with a disability own the Business? ^ Yes X No
If yes, is the business certified as a Targeted Small Business? ^ Yes ^ No
List the Business' Iowa Locations and the Current Number of Employees at each Location.
None currently in Iowa.
What is the Business' worldwide employment? (Please include employees of parent company, subsidiaries, and other
affiliated entities in this figure.)
8 Full time employees located in the Minneapolis, MN location and use of outside contractors as projects demand.
6. Briefly describe the proposed project for which assistance is being sought. (Include project timeline with dates, facility
size, infrastructure improvements, proposed products/services, any new markets, etc.)
Section A -Applicant & Project Information
The company has spent much of its time, and profits, on developing it's core technology for the Open Road Vertical. By using
profits from the current Vertical business, the company was able to develop and ready the Open Road product line for market.
Near the end of 2006, this project was completed and the first implementation was completed. Coupled with their other
verticals, Consumer Product and Vertical, the company is needing to expand its sales, implementation, technical support and
application development employment base. The company began exploring communities for expansion throughout the Midwest
in February 2007. The stated goal is to have a community chosen and a relocation package established in June of 2007.
The company is looking to move into the North Iowa Community College (NICC) facility in June 2007. The initial space will be
1,000 sq ft, expandable to 3,000 sq ft on 6-9 months. The company will then begin to look for a permanent facility on a lease or
lease-to-own basis with expected sq footage of 10,000 sq ft in 3 years.
Upon successful relocation, the company will continue to focus on their successful Consumer Product and Vertical channels, as
well as on their main growth channel, the Open Road software and service package for mid-to-small automotive dealers. It
should be noted that the company, while established with their Vertical and Consumer Product verticals, is needing to expand to
facilitate the launch of their Open Road platform, which is an earlier stage venture than the other two verticals, but drives a
majority of the future growth of the company.
7. Project Address (Street Address, City, and County):
North Iowa Community College (NICC)
Town Clock Center for Professional Development
680 Main Street
Dubuque,lA 52001
8. Type of Business Project:
^ Startup ^ Expansion of Iowa Company X New Location in Iowa
^ Relocation from another State
9. Please identify the management at the project location and his/her/their experience.
Several key management positions will be staffed in Dubuque. In addition, Rob Daniels, President of Genuine Genius,
will be located in Dubuque. His bio is as follows:
Rob is a fifteen year business professional with broad experience with small businesses and technology solutions.
Prior to founding Genuine Genius Rob spent several years working with Fortune 500 companies implementing new
technologies and streamlining business processes. Rob took his successful consulting practice, Malec, Inc. and
combined it through the acquisition of Virtual Information Systems, Inc., a twenty year old consulting business that was
losing money. At the new combined entity Rob revamped existing client relationships, developed a recurring revenue
support program and expanded the client base to include Excel Energy, Weisman Enterprises, Kawasaki, Polaris and
Oshkosh Truck. During his tenure Rob turned the organization around to experience 50% annual revenue growth and
15% net profits during a recessionary period.
Rob received his foundation for successful start up entities as part of the core team that established Portable Products,
Inc., a DIY tool carrier company specializing in new products. This organization grew from zero to $18 million dollars in
annual revenue in seven years selling every major retailer in North America prior to being acquired by Fiskars, Inc.
Rob experienced all aspects of the business spending the majority of his tenure managing the operations of the
organization which included manufacturing, warehousing, customer service, importing and a retail catalog division with
70 staff members in total.
10. Has any part of the project started? ^ Yes X No
Section A -Applicant & Project Information
11 Project Budget:
AMOUNT BUDGETED
Use of Funds Cost Source A Source B Source C Source D Source E Source F Source G Source H
Land Ac uisition $ $ $ $ $ $ $ $ $
Site Pre aration $ - $ $ $ $ $ $ $ $
Buildin Ac uisition $ $ $ $ $ $ $ $ $
Buildin Construction $ $ $ $ $ $ $ $ $
Buildin Remodelin $ $ $ $ $ $ $ $ $
Mf .Machine & E ui . $: $ $ $ $ $ $ $ $
Other Machine & E ui . $ $ $ $ $ $ $ $ $
Rackin , Shelvin , etc. $ $ $ $ $ $ $ $ $
Com uter Hardware $15,00 $ $15,000 $ $ $ $ $ $
Com uter Software $ $ $ $ $ $ $ $ $
Furniture & Fixtures $25,000 $ $25,000 $ $ $ $ $ $
Workin Ca ital $2'00,000 $50,000 $ $240,000 $ $ $ $ $
Research & Develo ment $ $ $ $ $ $ $ $ $
Job Trainin ''$158,499 $ $ $ $158,499 $ $ $ $
Sales/Mkt IA Dev `'$210flQ0 $150,000 $ $60,000 $ $ $ $ $
Technical Assistance :$25,000 $ $ $ $ $25,000 $ $ $ _ ___
"COTAL -_ X723,499 5200,400 _ $40,0 $300,000 `$158,499 $25U00 _~ $ $ $ J
~ Racking, Shelving and Conveyor Equipment used in Warehouse or Distribution Center Projects
Does the Business plan to lease the facility? X Yes ^ No If yes, please provide the Annual Base Rent Payment (lease payment minus property taxes, insurance, and
operating/maintenance expenses) and the length of the lease agreement. Estimated at $666/month per 1 K sq ft
PROPOSED FINA NCING
Source of Funds
(List tax benefits separately; not
as a source of funds.) Amount Form of Funds
(Loan, Grant, In-Kind Donation, etc.) Rate Term Conditions 1 Additional Information
Include when funds will be disbursed; if loan, whether
payments are a level term, balloon, etc.
Source A: IDED $200,000 Low Interest Loan -EVA TBD TBD
Source B: Local Government $40,000 Dubu ue-based RLF
Source C: Local E uit $300,000 Local An el Investor E uit
Source D: 260 a Job Trainin $15$,499 Administered throw h NICC Based on 25 sitions hired over 24 months.
Source E: Technical Assistance $25,000 Technical Assistance Grant -IDED/EVA Covers Site selection and relocation assistance.
Source F: $
Source G: $
Source H:
TOTAL $
$723,499
Please list below any tax benefits (e.g. Investment Tax Credit, Sales 7 ax Ketuntl, K&U I ax Cretllt, New Jobs I ax Cretllt, rroperry I ax txempnon~Abatement, etc.) mat the rjusmess expects
to receive and included the estimated value of each tax benefit: TBD but none expected at this point.
Section A -Applicant & Project Information 8
12. Employee Benefits: Please identify all employee benefits provided by and paid for (in full or in part) by the Business.
Employee Benefits Total Annual Cost Portion of Total Plan Provisions
Provided by the (show on a per Annual Cost Paid by (Include deductibles, coinsurance %, office visit
Business employee basis) the Business'` co-payments, annual out-of-pocket maximums,
face amounts, etc.
---
Em to ee
Famil
Em to ee
Famil
$4,193.14 $10,333.99 $3,354.51 $8,267.19 Deductible: 500/1000
Medical/Health Coinsurance:
Insurance Out of Pocket Max: 1800/5000
Office Co-pay: 25130
Emergency Co-pay: 75
Dru :5/30/45
$497.26 $1,225.51 $397.81 $980.40
Dental Insurance
Included in Medical
Vision Insurance
$250.00 $250.00 $50,000 Employee
Life Insurance Accidental Death & Dismemberment
Dependant Coverage
$ NA Spouse
$ NA Each Child
Short Term Disability
(STD)
Company will provide and pay 2/3 of
Long Term Disability premium. Estimates not available without
(LTD) identifying personnel.
TBD for 07/08
Other- Profit Sharing
" If the business's plan isself-insured, please use the amount paid by the business for costs associated with employee and family coverage
during the past three years and then, determine the business' average annual contribution per employee for that three year period.
Does the Business offer a pension plan, 401 (k) plan, and/or retirement-plan? ^ Yes X No
If yes, please indicate the amount contributed on a per employee basis by the Business to the plan. For 401(k) plans, please
provide information on the company match and indicate the average annual match per employee (show average as a
percentage of salary).
Does the Business offer aprofit-sharing plan? X Yes ^ No
If yes, please indicate total amount paid out each year for the past three years and then, determine the average annual bonus or
contribution per employee for that three year period.
The profit sharing plan will be established in 2007 to benefit the employees hired in Dubuque.
Does the Business offer child care services? ^ Yes X No
Section A -Applicant & Project Information
Child care services include child care services on-site at the facility in which the project will occur oroff-site child care
subsidized by the business at the rate of 50% or more of the costs incurred by an employee.
13. Identify the Business' competitors. If any of these competitors have Iowa locations, please explain the nature of the
competition (e.g. competitive business segment, estimated market share, etc.) and explain what impact the proposed
project may have on the Iowa competitor.
• The business has large IT service and software providers that compete for business with larger automotive
dealers with respect to the Open Road platform. The small to medium automotive dealerships are an underserved
market, hence the development of Open Road and opportunity to exists.
14. Will any of the current Iowa employees lose their jobs if this project does not proceed in Iowa?
^ Yes X Not Applicable - no current Iowa location
If yes, please explain why and identify those jobs as "retained jobs" in the following question.
Section A -Applicant & Project Information 10
15. List the jobs that will be retained and/or created as the result of this project. (A retained job is an existing job that
would be eliminated or moved to another state if the project does not proceed in Iowa.) For retained jobs, include the current
hourly wage rate. For jobs to be created, including the starting hourly wage rate.
Job Title Skills, Education, or Experience
Required Number of
Jobs Retained (R) or
Created C Starting or Current Hourly
Wage Rate
Year 1 of the Project
Mana ement 1 C $67,500
Administrative 1 C $33,000
Inside Sales & Marketin 3 C $39,000
Customer Su ort 1 C $33,000
Pre-Sales Su ort 1 C $52,500
Im lementation/Gust Trainin 4 C $47,500
Software Develo ment 2 C $60,000
Year 1 Subtotal 13
Total Number of Retained Jobs: 0
Total Number of Created Jobs: 13
Section A -Applicant & Project Information
16. Discuss each of the following items with respect to the proposed project:
a) the current employment conditions in the community, include any business closures, unemployment rates, etc.
and if applicable, the community's need for assistance in attracting the Business.
• Unemployment Rate: 3.9% as of February 2007 annualized at 3.5%.
• Recent Business closings and downsizings:
o Closed: Regency Thermography -137 jobs lost
o Closed: Unique Balance - 80 jobs lost
o Downsized: Flexsteel - 250 jobs over past 24 months
b) impact of the proposed project on the community and the state, include projections that reflect the impact on local
and state tax revenue and any additional costs the community will incur as the result of the proposed project;
• The company is projected to create 13 jobs in the first twelve months of operation.
• The impact of the project is continued momentum in the Greater Downtown Urban Renewal District which
is also an enterprise zone. This is a critical investment in the future of Dubuque and for the overall region.
This project is in an early stage of development and has potential growth beyond the two year
projections.
c) impact the proposed project will have on current employees, including the potential for increased skills and wages;
and
• All current employees are located in Minneapolis, MN. Up to 3 positions will relocate in Dubuque, including
company President Rob Daniels. Some operations will remain in Minneapolis. There are currently no
employees working or located in Iowa.
d) impact the investment will have on the ability of the business to expand, upgrade, or modernize its capabilities.
• The company has used profits from other verticals of the business to develop the Open Road software
platform. In order to grow their marketing, sales, implementation and service capabilities, they are requiring
investment. These monies will help establish the company in Dubuque, allow for a quick rollout (much
quicker than using the profits of the company) and allow for the necessary staffing of the office. As noted in
the financials, the company is slated to break-even in Month 9 of the project, after which the company's profits
will sustain and drive future growth.
17. Is the Business actively considering locations outside of Iowa? X Yes ^ No
If yes, where and what assistance is being offered?
In addition to Dubuque, IA, the Company is considering locations in South Dakota and North Dakota.
Proposed financial assistance from other communities include a blended package of low interest loans,
preferred stock investments, job training grants and tax incentives.
18. There are three general justifiable reasons for assistance. Check the box next to the reason why assistance is needed
to complete this project
X Financing Gap -The Business can only raise a portion of the debt and equity necessary to complete the
project. A gap between sources and uses exists and state and/or federal funds are needed to fill the gap.
^ Rate of Return Gap -The Business can raise sufficient debt and equity to complete the project, but the
returns are inadequate to motivate an "economic person" to proceed with the project. Project risks outweigh the
rewards.
^ Locational Disadvantage (Incentive) -The Business is deciding between a site in Iowa (site A) and a site in
another state (site B) for its project. The Business argues that the project will cost less at site B and will require a
Section A -Applicant & Project Information t2
subsidy to equalize costs in order to locate at site A. The objective here is to quantify the cost differential between site
A and site B.
What measures were analyzed to determine the amount and form of assistance needed?
Genuine Genius analyzed the project costs including start up expenses of the facility in Dubuque along with the initial
hiring and training of new employees to determine the total amount of the financial package required.
In terms of financing structure, the company analyzed their current and projected collateral base and balance sheet to
determine the appropriate blend of loans, equity and grants, along with financial assistance offered by different cities
and states. Based on the structure as proposed, all lenders should be sufficiently collateralized given their current
guidelines. Additionally, the company's key balance sheet ratios are will in line with standard lending ratios.
19. What amount of state assistance is requested based on the above-identified need? $225,000
What type/form of assistance is preferred (e.g. loans, forgivable loans, tax incentives, etc.)? A Low Interest Loan of
$200,000 through the EVA program and Technical Assistance of $25,000.
20. Please indicate what program(s) the Business is applying to and download and submit those applicable sections:
^ CEBA (Complete Section B)
^ EZ (Complete Section C)
^ HQJC (Complete Section D)
X EVA (Complete Section E)
^ VAAPFAP (Complete Section F)
^ EDSA (Complete Section G)
The Department reserves the right to review this application and determine, based on the proposed project and available
program funds, which financial assistance program(s) is best suited for the Business' project. The actual program(s) utilized
may vary from the programs indicated above.
Section A -Applicant & Project Information 13
21. Return on Investment Information -Business Taxes
IDED is required to calculate the return on sfate and local government investments in this project. Dafa from otherparts of the
application will be combined w-th the estimates requested below to calculate the required return on investment information.
Instructions for Question 21
- IDED is asking for a best estimate on the increase in taxes associated with this project.
- Estimates should only include the expected increase in tax liability resulting from this project.
- At minimum, IDED needs estimates for the first three years of the project.
- Show data as if no tax abatements or tax credits awarded for this project were taken.
- For partnership forms of ownership (e.g. limited partnerships, s-corporations, LLC, etc.), please estimate the
partners' increase in Iowa tax liability due to this project.
- Sales and use taxes refer to the taxes paid on materials, etc. that the Business purchases, not taxes you
collect from sales to your customers.
- Applicants will not be held to these numbers with respect to any award from or contract with IDED.
- This page of the application will automatically be treated as confidential.
Increase in Tax Collections Associated with this Project
State Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5
State Corporate Income Tax* $ 0 $100,000 $ 240,000 $ 330,000 $ 390,000
State Business Sales and Use Tax $ 750 $ 2,900 $ 4,000 $ 6,800 $ 8,100
* Insurance Companies: Provide State Insurance Premium Tax
Local Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5
Local Real Estate Property Tax $ 0 $ 0 $ 0 $ 0 $ 0
Local Option Sales Tax $150 $ 150 $ 200 $ 250 $ 250
Section A -Applicant & Project Information 14
Attachments
Please attach the following documents:
Al Business Plan
At a minimum, include:
• marketing study,
• feasibility study,
• projected profit and loss statements for three years into the future,
• project budget,
• production operations,
• management structure,
• personnel needs,
• descriptions of product or process,
• status of product/process development, and
• patent status (if applicable).
(Any information outlined above not included in the business plan should be submitted as supplemental information via
a separate attachment.)
A2 Copies of the Business' Quarterly Iowa Employer's Contribution and Payroll Report Summary Page (Page 1) for the
past year and a copy of the most recent payroll report for one pay period.
A3 Affidavit that states the Business has not, within the last five years, violated state or federal statutes, rules, and
regulations, including environmental and worker safety regulations, or, if such violations have occurred, that there were
mitigating circumstances or such violations did not seriously affect public health or safety or the environment.
A4 Financial Information (Existing Businesses Only)
• Profit and loss statements and balance sheets for past three year-ends;
• Current YTD profit and loss statement and balance sheet;
• Schedule of aged accounts receivable;
• Schedule of aged accounts payable; and
• Schedule of other debts.
Application Checklist
Section A -Applicant & Project Information 15
Application Checklist
For each section the Business is required to submit, please indicate with a `/' that items needed for that section are included when submitting the application to IDED.
If an item listed is not included, please indicate in the corresponding box the date on which IDED can expect to receive it or explain in the space provided below why it has
not peen mciuueu:
Section B
Section C
Section D
Section E
Section F
Section G
Section A CEBA EZ HCJC EVA VAAPFAP EDSA
Ori final lus 1 Co _
NIA
NlA
NlA
/
NIA
NIA
Si ned b the Business
Nof heeded
Signed by the Sponsor(s) N!A NlA NIA for EVA,
available if NIA NIA
nested
Business Plan w/ 3- ear Pro ections NIA NIA NIA ~ NIA NIA
No
Quarterly Employer's Contribution and Payroll Reports
NIA
N!A
NIA employees
currently in
NIA
NIA
bwa
No
Current Payroll Report NIA NlA NIA employees
currentty in NIA N!A
Iowa
Affidavit re: Violations NIA NlA NIA / NIA N/A
2004 and
20D5
P/L statements & Balance Sheets (3 years) NIA NIA NIA a~c~hse~d. N!A NIA
available 'I
5115107.
Current YTD Financials NIA NIA NIA / NIA NIA
Aged Accounts Receivables _ NIA NIA N(A / NIA NIA
Aged Accounts Payable N!A N/A NIA J NIA NIA
Schedule of Other Debts N/A NIA 'N/A / NIA NIA
Resolution from Sponsor N/A _ / NIA NIA
Project
address
Legal Description of Project Site N!A NIA l~l~ ~n N!A N/A
no leas
si ned et.
Application Checklist
Map N/A NfA _ / NIA
City
approval not
needed for
Meeting I Public Hearing Notice
NIA
NIA "
NIA EVA, but
resolution N!A
for May 7
meeting
attached.
Meeting on
May 7,
Meeting Minutes
NIA
N/A
NIA minutes
available NIA
thereafter if
r u
Listed in
Technical Assistance Budget NIA NIA N/A NIA appl cat on - NIA NIA
Section E
Quotes, & Estimates
Bids NIA N/A NIA NIA N/A NIA
,
Em to er Certification Form NIA NIA NIA NIA NIA NIA
Commitment Letters NIA NIA NIA NlA NIA N1A
Comm. Develo ment & Housin Needs Assessment NIA NIA N!A N!A NIA N/A
Assurances Pa a N/A NIA NIA NIA NIA NIA
Applicant/Recipient Disclosure/Update form N/A NIA NIA N!A NIA N1A
Explanation for Items Not Included:
Application Checklist 2