The Crookston Housing and Economic Development Authority (CHEDA) Board met on Tuesday morning. They approved a resolution authorizing the sale of property located south of Casey’s General Store to AGP Development for $90,000. They also passed a recommendation to the City Council for a business subsidy agreement with APG.
The business subsidy is for a two-year tax abatement not to exceed $110,000 upon completion of the initial development. Executive Director Craig Hoiseth said that with the action in today’s meeting APG should be on their way to building a multi-family development on the project. “APG has their variance in place, and now we have the approval for the disposal of that property,” said Hoiseth. “Essentially, the board has authorized me to execute that purchase agreement for the property. And they acknowledged and recommended to the City Council the business subsidy agreement to be a good thing for Crookston. The Planning Commission should act tonight for the proper use, and APG should be on their way to making a multi-family development there.”
B3 GRANT FOR SNAP FITNESS
The board also approved a B3 grant for Snap Fitness, owned by Brandon, Robert and Bill Kresl. Snap Fitness is expanding its footprint and modernizing its equipment with a total project cost of $50,206.51. Commissioner Craig Morgan said the Snap Fitness project fits what the B3 grant was intended to accomplish. Snap Fitness was eligible for $5,000 on the grant as Brandon is a graduate of both Crookston High School and the University of Minnesota Crookston explained Hoiseth.
BUDGET FINALIZED
The budget will be finalized at the October 22 board meeting, and Hoiseth said there is still some work to do in the upcoming weeks with a deficit of $27,875.84. “We’re showing a little bit of deficit,” said Hoiseth. “We still have some work to do in the upcoming weeks but wanted to get the preliminary budget out for the board to review. They have that in their hands now, and I’m sure there will be questions and answers in the next few weeks as we try to formulate that. And we’ll get the input data from HUD from the housing authority side, and try to shore up the little deficit we have on the economic development side.”
Last week it was announced that the Sunrise Center is closing. Hoiseth said, unfortunately, that lessens the likelihood that Regal Academy will make a significant impact in reducing the childcare shortage in Crookston. However, he updated the board that Regal Academy was proceeding with their board in place, and is proceeding towards hopefully opening as Sunrise Center ceases operations. “The Sunrise Center closing was very unfortunate for the City of Crookston and surrounding area as it does further exacerbate the problem of a childcare shortage,” said Hoiseth. “But, fortunately, we do have Regal Academy that is coming on and doing a good job. There is a new board of directors that has been put in place. They are working on their by-laws and have achieved their non-profit status. They are working on the buildout of the facility, and hopefully, as the Sunrise Center does cease operations, Regal Academy will be up and running. So, we’re fortunate in a way that we have a soft landing for our young people and families around the area but certainly more work to do on the childcare situation.”
VERTICAL MALT
Adam Wagner from Vertical Malt also provided the board with an update on the design and financing for Vertical Malts plans to build a malt house on the south end of Crookston. Wagner said the hope is to break ground on the facility in the spring of 2020 with the new facility creating 8-10 jobs with an estimated payroll of $300,000. “Adam Wagner was here, he has a consultant Rob Liedl, who will be working with him on designing the malt house and getting the financing put in place,” said Hoiseth. “Hopefully, over the next few months, we’ll be able to see some movement on Vertical Malt. As you’re aware, CHEDA did authorize some expenditure to help pay for that consulting work to help Adam get his business up, running, and growing the way it needs to be.”
PLUMBING PROJECT QUOTES
Hoiseth also presented the board with the quotes for the plumbing project for Oak Court. The project is primarily funded through a grant with Minnesota Housing, and the quotes came in over the anticipated $1.5 million estimates by $500,000. With change orders, the final cost would probably exceed estimates by around $500,000 and the CHEDA board authorized Hoiseth to approach Minnesota Housing with 10 percent of the gap financing with the hopes Minnesota Housing would fund the rest. “The original grant was right in the neighborhood of $1.3 million, and CHEDA was going to fund about $250,000 of additional gap funding,” said Hoiseth. “The bids came in over $1.5 million. And when you start adding on different amenities and change orders, we’re looking at about a $1.9 to $2 million project, and you have a shortfall of about $500,000. We were looking to the board for direction today to interface with Minnesota Housing about what kind of leverage we can create on that $500,000. Continuing at a 20 percent level we would have to take another $100,000 of reserves and our reserves aren’t that easily built up. The board today said – let’s interface back with 10 percent leverage on that $500,000 – and hopefully Minnesota Housing will find the difference.”
The $50,000 will come from reserves, but Hoiseth told the board he wasn’t sure if they would want to cut too deeply into that which is why they authorized approaching Minnesota Housing at 10 percent. The reason for not dipping into reserves too far is that CHEDA is required to keep six months operating expense in reserves for public housing, and they still have a roofing project to complete at Oak Court. Crookston City Administrator Shannon Stassen commented that both projects need to be completed and if CHEDA had to use funds to get this done and the need for the roof comes up, they could come to council for assistance. Hoiseth said the roof project would be the last of three Oak Court projects that CHEDA needed to complete along with the current plumbing project and an elevator project they’d already applied capital funds too. “City Administrator Stassen did make a comment that if we have to do the roof, we’ll look at it then,” said Hoiseth. “We’re going to keep that separate. We left it off this project because we knew it would increase the cost significantly. We have worked forward with redoing the elevators with our capital funds, so that is underway. So, after we do the plumbing project and the elevators, the only remaining item will be the roofing project.”
