REDMOND — The city of Redmond is offering no-interest and no-repayment business loans in the hope of luring new employers and more jobs to town.

The city’s Industrial Opportunity Fund looks to entice high-paying industrial companies to the area with loans that can be forgiven over five years. The city is also offering zero-interest loans through its Restaurant Capital Improvements Program.

Redmond City Council approved the loans at the Urban Renewal District Agency Board meeting Tuesday morning.

Community Development Director Heather Richards told the council the industrial fund looks to bring new companies to 170 acres of industrial zoned land on the city’s east side.

“I’ve asked other businesses if in the grand scheme of things, in relocating (a business) is this even going to make a dent?” Richards said.

“The answers I have heard are that yes, it will. When you start up, you often see some cash flow problems and this loan will help.”

Forgiving the debt

A loan from the Industrial Opportunity Fund can pay up to 20 percent of development or improvement costs depending on the wages a company pays its employees.

Each year the city will set a minimum limit on the wages and benefits a company must pay to be eligible. This year’s limit is set at $47,664 per employee, including wages and benefits. The city estimates that number is 1.35 times the average Deschutes County wage.

Repayment of the loan can also be forgiven. The city will erase 20 percent of the original loan amount for each year a company keeps employee wages above the threshold.

“After five years the loan could disappear,” said Jon Williams, the city’s economic development project manager. “That is if they fulfill what is expected of them.”

There is no upper limit on how much can be loaned to one company. The city has $2 million allocated for the program.

The loan is also available to current Redmond businesses creating new jobs in the area.

Restaurant incentives

The restaurant program looks to develop a district in the downtown area by offering no-interest loans to startups.

The funds are to help pay for capital improvements to restaurants such as HVAC systems, professional ovens and electrical upgrades.

In an interview earlier this month, Richards called restaurants a “domino business,” and said clustering eateries in one area will help retail businesses develop.

The restaurant loans will be allocated by an increasing percentage as project costs increase. The loans max out at $50,000 per business.

The money for the loans comes from tax increment funds collected by the city as part of a special district under the Redmond Downtown Urban Renewal Agency. The funds can be used for projects that support brick and mortar developments that increase property tax base, reverse blighted conditions and achieve the goals of an urban renewal plan.

The city is currently in the process of implementing an urban renewal plan with over two dozen projects focusing on creating jobs.

The Industrial Opportunity Fund and the Restaurant Capital Improvements Program are two of those projects.

Potential loan applicants can request more information by contacting Jon Williams at jon.williams@ci.redmond.or.us.