Motion setting October 13, 2026 as the date of hearing to consider a loan request from Verdant Agritech LLC (DBA Verdant Organics) to purchase equipment.

Motion setting date of hearing.

An application requesting an economic development revolving loan has been submitted by Verdant Agritech, LLC to purchase equipment to be used for Verdant Organics.

Verdant, in partnership with the property owner, will construct a 63,000 square foot indoor farming facility at 1761 Energy Drive to grow premium organic microgreens and blue oyster mushrooms year-round. It’s anticipated construction of the facility would begin late 2026 or early 2027 and its anticipated construction would be completed within approximately 9 months.

The request to the EDA is to finance a portion of the $2.6 million capital equipment costs. The request to the EDA is for a $300,000 economic development revolving loan for the purchase of equipment.

The equipment would include:

• Tank water heaters;
• Air conditioning with Makeup Air;
• Back-up generator - Genx;
• Water filtration systems;
• Water chilling system;
• Carbon Dioxide collection, storage, and carbonization systems;
• Air compressor – High PSI;
• Automated tray seeder with watering bars.

Verdant has shared the equipment is vital to the operation of the facility. Per the revolving loan guidelines, the term of the loan would be for 7 years and the rate would be 70% of the prime rate. At this time, the current prime rate is 6.75%, which means the loan rate would be 4.725%. The revolving loan guidelines state that repayment of the loan is to begin within one month of taking possession of equipment purchased with loan funds, and that exceptions to this may be made on a case by case basis. Verdant Agritech, LLC has requested to begin making interest payments once the facility begins operations and interest and principal payments once the facility has been operating for 1 year.  
The revolving loan guidelines require a minimum 10% equity investment of the total project costs. The loan application notes of the $2.6 million in equipment costs, $500,000 would be private funds from Organics Ventures LLC, $1,400,000 in existing raised equity, and $400,000 from a Minnesota Growth Fund loan, in addition to this loan request.

The revolving loan criteria limit the loan amount to $300,000 or 40% of the total project costs, whichever is less. One permanent full-time job must be created or retained within two years of the loan closing for each $50,000 borrowed from the revolving loan fund. Verdant Agritech, LLC is requesting financing that totals $300,000, which means at least 6 full-time equivalent jobs would need to be created. Per the revolving loan guidelines, the positions shall pay at least 110 percent of the federal poverty rate for a family of four within two years of the loan closing. Verdant anticipates there would be 17 jobs created within year one, and 75 jobs created in year two, and would exceed the revolving loan guidelines for wage rates.

State Statute requires a business subsidy agreement be approved by the City Council when assistance exceeds $150,000. A resolution authorizing a business subsidy agreement would be presented to the City Council for consideration at a future meeting.

In Verdant’s application, it was indicated that Verdant will, “address key challenges facing food service and retail buyers, including inconsistent quality, unreliable supply, limited shelf life, and food waste. Clean-room cultivation eliminates washing requirements, while proprietary gas-flushed packaging extends shelf life up to four times longer than conventional products, reducing spoilage and improving inventory management.”

The purpose of the revolving loan program is to increase the City’s tax base, create and retain jobs and improve economic opportunity and living standards for the residents of Mankato by promoting local business development and expansion and leveraging private sector funds.

The requested action is a motion setting October 13, 2026, as the date of hearing to consider the loan request.