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CHEDA BOARD APPROVES TWO B3 GRANTS, NEW PROGRAM GUIDELINES AND REVIEWS 2020

January 19, 2021

The Crookston Housing and Economic Development Authority (CHEDA) Board held its annual meeting on Tuesday morning. It was a light agenda for the board although they did review two Building Better Business (B3) grants, updated the B3 guidelines, and approve the use of funds to purchase property from Bob Herkenhoff.

The two grants that were approved were submitted before the guideline update. Those grants were approved, explained Executive Director Craig Hoiseth. “The B3 applications considered today were for I.C. Muggs and Adams Heating & Cooling,” said Hoiseth. “The board approved both of those B3 grants – $4,000 for I.C. Muggs and $5,000 for Adams Heating & Cooling.”

Adams Heating & Cooling received a loan from CHEDA in October (here) for $70,000 to purchase a storefront at 511 Strander Ave. The B3 grant will support a project to add a new overhead door; metal siding, and installation; along with an LED sign and lights totaling $18,200. I.C. Muggs grant was for new carpeting in the entire building, which totals $12,500. Board member Craig Buness noted that a carpeting project would likely be considered general maintenance under the new guidelines being adopted and not be eligible for the grant program moving forward.

The board also approved changes to the B3 program recommended by the focus group that met in early January consisting of City Administrator Amy Finch, Hoiseth, former City Councilman Jake Fee, City Councilmen Dylane Klatt, and Tom Vedbraaten; and CHEDA Board members Craig Buness, and Leon Kremeier; said Hoiseth. “The focus group did a really nice job, as you reported last week,” said Hoiseth. “We appreciate KROX getting that message out because the board was very well informed; approved all of the focus groups recommendations; and made a motion to adopt the new guidelines going forward.”

The base grant amount for the B3 program remained $3,000, and the goals of the program are to encourage new business and jobs, increase the commercial tax base, occupy underutilized and vacant buildings to encourage new investment and strengthen landlord return on investment, and to advocate for community vitality and presentation. The program is open to businesses with brick-and-mortar operations. Hoiseth told the board that the focus group discussed including businesses operating without a location or having a mobile operation such as a trailer, but that with the goals of creating jobs and increasing tax base as a taxpayer-funded program, those businesses don’t fit the goals of the program.

The changes made include:

Increasing the additional funds above the base total for new business or businesses relocating to Crookston to $2,000 with a maximum grant of $5,000
If a business relocates out of Crookston within two years of receiving the grant, the payback will increase from 50 percent to 100 percent.
Businesses not completing the grant application’s work within six months would need to pay back 100 percent of the funds.
An informal presentation of the grant application to an ad hoc committee consisting of Hoiseth, Finch, and two City Council members not on CHEDA Board who would recommend the grants being forwarded to the CHEDA Board.
Stressing storefronts, marketing, and advertising. Routine maintenance items will generally not be approved, but the application would remain available for an emergency need on a case-by-case basis.
Allowing landlords of empty buildings to apply for grants to rehab storefronts to attract tenants.

A redline version of the B3 program updates is available below –

At the December meeting (here), the CHEDA Board announced an attempt to purchase 60 acres east of Nature View Estates from Bob Herkenhoff for housing development. Hoiseth told the board that discussions on the purchase had proposed an annual installment of $125,000 over three years for the property by CHEDA and the City of Crookston. The board approved using funds from the $350,000 received in 2018 from the City of Crookston to make the first payment. Hoiseth said that housing was one of the established goals for what he called the Community Investment Fund. “The four goals of the Community Investment Fund to accomplish, number one; child care,” said Hoiseth. “Number two; business incentives. Number three; housing. Number four; workforce training. As you know, the Child Care we went out and got some matching dollars to leverage that. We built a revolving loan program for businesses complemented to leverage USDA funds ($101,000 from CHEDA; $99,000 from USDA). It’s harder to get leverage for housing, but the board realized we had to move forward on a housing initiative. Purchasing this Herkenhoff acreage was right in that wheelhouse. The Councilmembers who were here agreed with City Administrator Amy Finch and me that the first installment should come from that Community Investment Fund.”

The board also received an update from Hoiseth on child care, which remains an acute need for the Crookston community. Gotta Love Kids opened off the town square in early January, and Hoiseth said Crookston’s Little Pirates Company (formerly Regal Academy) had located a possible location in town which they are reviewing. “We’re still moving forward,” said Hoiseth. “We’re have been working on it to try to make sure we are providing adequate child care opportunities for our workforce here in Crookston. We’ve zeroed in on a spot. Now we’re evaluating that spot with an engineering review to see what it will take to make it into a Minnesota qualified child care center.”

Hoiseth also presented a review of 2020 to the board (below). “We took the first 10-12 minutes at the meeting today and went through the year 2020 in review, recognizing that a lot of work got done at the CHEDA Board level,” said Hoiseth. “Wanted to acknowledge the board that had served so diligently. And culminated at the end with a thank you to Craig Morgan for his service and a welcome to Craig Buness.”

One item of note from the review was that the housing rehab program, which to date has rehabilitated 22 homes, has increased their cumulative property value from $649,666 to $1,952,600.