Genuine Genius Solutions UDAG Action GrantTHE CITY OF
DUB E
Masterpiece crn the Mississippi
MEMORANDUM
September 25, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Authorization of UDAG funds for Genuine Genius Solutions, LLC
Economic Development Director Dave Heiar is recommending that the City of Dubuque
substitute the use of Urban Development Action Grant (UDAG) loan funds rather than
the Community Development Block Grant loan funds for the Genuine Genius Solutions,
LLC project. In April, Genuine Genius Solutions, LLC, announced its intent to relocate
its operations in downtown Dubuque. The Company, which originated in Minneapolis,
will create 13 new positions in Dubuque as part of this relocation and expansion
process. The Company is eligible for State financial assistance with a local community
match. City assistance as public match was proposed to be a $40,000 CDBG low
interest loan.
In working to prepare the CDBG loan documents with Genuine Genius Solutions, it was
realized that the income requirements for new employees hired by the firm could not be
achieved. This is because to hire employees with the required experience for the
position the compensation would be significantly more than the income requirements of
the CDBG Economic Development Loan Program. The City has identified funds
available in the UDAG Program, which is reserved for economic development projects,
to fulfill the $40,000 local commitment to the Genuine Genius Solutions project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Z~~~~ ~ /~
Mic ael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
THE CITY OF
DUB E MEMORANDUM
Masterpiece on the Mississippi
September 21, 2007
TO: Michael Van Milligen, City Manager
FROM: David Heiar, Economic Development Directo
SUBJECT: Authorization of UDAG funds for Genuine Geni s Solutions, LLC
INTRODUCTION
This memorandum presents for City Council a request to substitute the use of Urban
Development Action Grant (UDAG) loan rather than a CDBG Loan for Genuine Genius
Solutions, LLC, an idea architecture firm that targets specific interests.
BACKGROUND
In April, Genuine Genius Solutions, LLC announced its intent to relocate its operations
in downtown Dubuque. The Company, which originated 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 company temporarily moved into the Northeast Iowa Community College (NICC)
downtown facility in June 2007. The initial space is 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.
On May 7, 2007, the City Council approved an EVA (Entrepreneurial Venture
Assistance) application with the Iowa Department of Economic Development. The
application consisted of an EVA loan of $200,000 and a technical assistance grant of
$25,000. City assistance as public match for the EVA application was 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. An Enterprise Zone application is also being
considered pending the permanent location site.
DISCUSSION
In working to prepare the CDBG loan documents with Genuine Genius, it was realized
that the income requirements for new employees hired by the firm could not be
achieved. This is because to hire employees with the required experience for the
position would be paid significantly more than the income requirements of the CDBG
Economic Development Loan Program.
Budget Director Jenny Larson has found funds available in the UDAG program to fulfill
the $40,000 local commitment to the Genuine Genius project.
RECOMMENDATION
I recommend that the City Council authorize the use of UDAG funds instead of CDBG
funds to provide a $40,000 loan to Genuine Genius Solutions, LLC for the local
commitment stated in the EVA application. The loan terms would remain the same.
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 authorize the use of the UDAG program to fund
a $40,000 loan to Genuine Genius Solutions, LLC with the same loan terms as
previously approved.
attachments
F:\USERS\DHeiarlGenuine Genius Solutions\Genuine Genius authorization of UDAG funds Council Memo.doc