Title
RESOLUTION AUTHORIZING THE SECOND AMENDMENT TO THE CITY LOAN AGREEMENT WITH SOFIDEL AMERICA CORP.
Body
CITY PROPOSAL:
WHEREAS, on October 5, 2022, the city and ST Paper 1, LLC ("ST Paper") entered into a forgivable loan agreement for an amount of $242,000 from the city's grants and awards fund, to help secure ST Paper's acquisition and conversion of the previously-shuttered paper mill at 100 North Central Avenue (the "paper mill"). The term of the loan runs through July 1, 2033. The agreement includes an ongoing obligation on the part of the paper mill owner to maintain 80 new jobs for the duration of this term; and
WHEREAS, on December 22, 2023, ST Paper gave written notice to the city of its intent to sell the paper mill to Sofidel America Corp. ("Sofidel") and requested amendment of the loan agreement to substitute Sofidel for ST Paper as the paper mill owner; and
WHEREAS, on January 22, 2024, the City of Duluth ("City") approved a first amendment to the loan agreement; and
WHEREAS, the City seeks to authorize a second amendment to the loan agreement to align deadlines and job requirements with that of Sofidel and the current expansion.
BE IT RESOLVED, that the proper city officials are authorized to enter into a second amendment to the city loan agreement substantially in the form of Exhibit A.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution authorizes city officials to enter into a second amendment to the city loan agreement. This loan was originally approved by the Minnesota Department of Employment and Economic Development ("DEED") to support ST Paper's purchase of the Duluth paper mill in 2021. ST Paper purchased the paper mill in 2021 and invested over $56 Million dollars in construction and new equipment. At the time of ST Paper's purchase, the city supported the private investment through two loans and tax abatement. A development agreement was...
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