The Crookston Housing and Economic Development Authority (CHEDA) met on Tuesday morning at the Valley Technology Park. The board approved minutes from their July meeting and from a special board meeting in August. The board also approved the consent agenda, including updates EDA financials, loan status and financials, housing financials and occupancy and financial information for Valley Technology Park. Also included on the consent agenda were bills in the amount of $481,562.51. Executive Director Craig Hoiseth went over details from the preliminary budget with the board. “It’s a preliminary budget so it’s a work in progress, so over the course of the next two to three weeks board members will be inquisitive on specific line items,” said Hoiseth. “Our hope is by the October meeting we’ll be able to get an approved budget for next year.” 
The board also discussed the Building Better Business (B3) grant program. The grant is available to business owners within the Crookston city limits that are in a tax paying property which is or becomes occupied. Businesses can be granted up to $3000 and must provide matching funds. An additional $1000 in funds is available for a business owner that graduated from Crookston High School. Graduates of the University of Minnesota Crookston or Northland Community & Technical College may be offered an additional $1000. And an existing business wishing to relocate to Crookston may also be offered $1000 in extra funds. The maximum award is $5000.
“We’ve been letting this incubate for five or six months and we’ve consulted with the city attorney on state statutes,” said Hoiseth. “Essentially today the board was giving a thumbs up, made a motion to approve the B3 budget with a couple of edits, one being looking at high school and college graduates and making sure we have ducks in a row on the administration end of it.” The board also approved allowing non-profit organizations to apply for the program, a change from the original proposal.
The final topic of discussion was about the future of Cofe`. The business’ current owners closed the doors on September 15, but potential buyers are actively being recruited. A significant portion of the discussion focused around outstanding loans. “Unfortunately, Cofe` has ceased to do business but we have been working with them trying to find new owners for the business,” commented Hoiseth.
Currently, CHEDA is the secondary loan holder and if new owners aren’t found would likely be out most of their outstanding loan of $68,000. It was discussed that if an evaluation of the future business plan and financial modeling on a potential new owner is satisfactory, CHEDA would consider increasing the funding amount of Cofe`. The desire would be that primary lenders (banks) take the lead role and CHEDA provide the necessary gap financing, but the board will evaluate the actions of the primary lenders and respond accordingly. Considerable discussion went into whether if primary lenders were not willing to take on the debt, would CHEDA be willing to assume additional debt to the business which would likely bring into the first position on the available inventory and assets of the business.
While several board members expressed concern over the possibility of additional debt, the added security level from inventory and assets, would likely be a reasonable threshold at which to cap an increased investment. If satisfactory owners are found, it would provide CHEDA an opportunity to recoup the $68,000 that it would currently stand to lose on the current loan.
