01-0361R

RESOLUTION SUPPORTING APPLICATION OF DAVID AND MICHAEL HUDYMA, D/B/A BRIGHAM UPHOLSTERY, INC., FOR A STATE CHALLENGE GRANT.

BY COUNCILOR STENBERG:

        WHEREAS, pursuant to the Rural Development Act, local units of government are required to issue a sponsoring resolution on behalf of the business requesting financing through the Northland Foundation; and

        WHEREAS, the city of Duluth has received a request to issue a resolution on behalf of David and Michael Hudyma, d/b/a Brigham Upholstery, Inc.; and

        WHEREAS, it is consistent with the purpose of this governing unit to encourage employment and increase tax base.

        NOW, THEREFORE, BE IT RESOLVED, that the city of Duluth supports this application for funding on behalf of David and Michael Hudyma, d/b/a Brigham Upholstery, Inc.



STATEMENT OF PURPOSE:  The purpose of this resolution is to support the application of David and Michael Hudyma, d/b/a Brigham Upholstery, Inc., for a state challenge grant through the Northland Foundation in the amount of $45,000.

Brigham Upholstery is an automotive and commercial upholstery business currently located at 19 North 14th Avenue East. It is owned by David and Michael Hudyma, a father and son team who have a combined 36+ years experience in the upholstery business. They also employ two part-time upholsters. Historically, they have worked in the automotive and commercial market. However, in 1999 they began working with Cirrus Design to upholster seats for the SR20 airplane, securing a contract through mid-2002. They also anticipate securing the contract for the new SR22 airplane. Because of the increased work to accommodate Cirrus, and the lack of space in their current 1,300 sq. ft. building, they have had to turn away and reduce by about 50% their work with automotive and commercial customers.

Thus, they propose to purchase land in the Duluth Airpark and build a 5,000 sq. ft. light manufacturing pole building that will have a closer proximity to Cirrus as well as to their traditional customers, the automotive dealers, who have migrated to the Central Entrance corridor.

This project requires a $379,100 financing package that includes a $234,000 bank loan (approved), $45,000 loans from both the NE Entrepreneur Fund (approved ) and the Northland Foundation (approved) , as well as owner's equity. Collateral for this Northland Foundation loan includes a shared second mortgage on the new building, a shared first mortgage on their existing building, a perfected security interest in the business assets, and a corporate guarantee.

With their expansion, the Hudymas expect to add three full-time employees with base wages in excess of living wage requirements plus health benefits.