The Crookston Housing and Economic Development Authority (CHEDA) held a working session Tuesday afternoon with members of the Crookston City Council and community. The meeting centered on the developing the initiatives to invest the $350,000 the Crookston City Council voted to transfer to CHEDA on November 13 for economic development and a reserve fund for Valley Technology Park (VTP) which has been built up through the buildings rent to tenants.
Back in November, the City Council voted 6-2 to transfer $350,000 to CHEDA for economic development, Councilman Clayton Briggs and former Councilman Dennis Regan voted against the resolution. The meeting to develop the priorities and strategies for that money succeeded in setting some priorities but was called short by CHEDA Chair Kurt Heldstab after a disagreement broke out over the long-completed process of transferring said money to CHEDA.
The productivity of the meeting came to standstill when Tim Denney asked whether the decisions on what to spend those funds on would be brought forward for public input. He said by transferring the money to CHEDA without an established or with a changing plan, it was shielding the spending of money from public view. Denney speaking after the meeting said his question was whether the public would have input in the plan. “My only question was would the taxpayers have a chance to have any input into the changes in the spending plan,” said Denney. “That money was approved for a certain set of things and that’s fine. But if we’re going to change that I was asking if there is a process for the taxpayers, the citizens to hear about that like in a council meeting. Apparently, the answer was no. But that’s what I was hoping we could get to, was one more shot for the community to have input if they want to. Maybe they don’t want the input, but it seems to me to be appropriate to give them that.”
Denney’s understanding that there was no public input was contrary to what was said during the meeting by several CHEDA board members and Councilmen. Heldstab said the CHEDA board makes a recommendation for how to spend the money and council approves where that money goes. Councilman Jake Fee also said he didn’t know what Denney meant by there isn’t public input. He stated CHEDA meetings are open to the public, there is an open forum every meeting and the rules are the same as they are for the City Council as far as posting agendas. In fact, Minnesota Statute 13D.01, subd. 6 on open meeting law neither requires nor prohibits agendas, although CHEDA does post the agenda for each meeting in advance on the bulletin board at VTP just as the City Council agendas are posted at City Hall.
Fee also said the council approved $350,000 for additional economic development, not for specific projects or programs already being run. City Administrator Shannon Stassen said the process for moving money (to CHEDA) was not the right process. He said talks were on spending money on a couple of items and then the money came over on a different pretense. Adding we’re now talking about different things on how to use the money which is good.
CHEDA Executive Director Craig Hoiseth responded that the draft document for uses of the funds he had provided council listed several possible initiatives the money could be used for – Child Care, Land Acquisition, Housing Incentives and Rehab, and Workforce Training- the same topics that worked discussed in the working session Tuesday. Hoiseth added that CHEDA and the City Council work collaboratively stating that every council member except Briggs attended the working session.
Fee said if we’re not going to use our money for economic development why are we collecting it, saying it was sitting in reserves so obviously the city didn’t need it. He then said, “I think you, Shannon, need to get over it.”
Stassen responded, “Oak Court was on (the draft document).” To which Hoiseth said that CHEDA removed Oak Court renovations from uses for that money after input from the Council said the money should be used for economic development. He added that we need to work towards what is best for Crookston.
Heldstab then called the meeting to curtail further escalation of the disagreement as the meeting’s purpose had broken down. Stassen immediately left the facility before he could be asked for comment and Fee said he had no comment. Hoiseth, however, did speak to the underlying issues that seemingly plaque his and Stassen’s working relationship and what can be done to better that relationship. “The City Administrator and I need to work, really, hand-in-hand to make the priorities of Crookston move forward,” said Hoiseth. “Both Shannon and I are extremely passionate about the positive outcome of Crookston and how we want to develop that. Certainly, the City Council is who Shannon answers too and I answer to my CHEDA Board of Commissioners, which two of those commissioners are City Council people. So, we are fairly well aligned, it’s just a matter of working out some of those little bugs. I feel that there is no problem in that.”
Earlier in meeting things deviated off course for a moment when Lori Wagner, who said she was speaking as an outside observer, not in her role with the United Way brought up the council’s issues with the CHEDA coffee maker purchase. She said CHEDA brings business to town, and that it was a part of the remodel to showcase those successes. The technology space being provided was a place to meet with those businesses when they come to town and for people and businesses in town to use for meetings. She used the analogy of Mayor Guy Martin, City Administrator Shannon Stassen and CHEDA Executive Director Craig Hoiseth being links in the chain to make Crookston successful adding that as an outsider it feels like Crookston is broken and if people can’t get along the City isn’t going anywhere.
Stassen thanked Lori for her perspective and acknowledged the redesigned space looked nice but questioned whether the VTP was truly incubating business or competing with spaces in town stating people have retired out of (VTP). He said this is a conversation that could’ve been had before (Tuesday), adding he believes it’s the same as fill-in housing, start from the core (downtown) and work out. Hoiseth responded that CHEDA would love to have a place downtown, but referenced the Mayflower Building in Bemidji, a business hub for emerging entrepreneurs, and startup tech and engineering businesses stating a building like that costs about $2 million. Adding that what CHEDA was accomplishing on a small scale was a trial space for $25,000.
Things got back on track with a discussion about using the VTP reserve to set up a retail business incubator or collaborative workspace downtown. Hoiseth said it is possible if that was the way the city wanted to go the VTP funds could be a mechanism to make either of those types of spaces possible. The funds are available due to a shift in focus for VTP that changed from a traditional business incubator, a model which typically has a negative cash flow, to strategically recruit tenants that would be complementary to economic development. “It used to be more of a business incubator model,” said Hoiseth. “Those models by their very nature are difficult to cash flow. Of course, as you’re looking at budgets and funds every year if you have a negative cash flow you say – we have a negative cash flow and we’d like to get rid of that. So we struck out with a strategic initiative to try to recruit tenants to be complementary to CHEDA and economic development. Those tenants are here in AURI and Extension. They are paying the leases and those cash payments are enough to cash flow this building by themselves. In addition, we have other tenants whether incubating, primary or secondary tenants that provide a positive cash flow.”
Hoiseth said several good ideas came up about how to utilize the funds created by VTP. “Some of the ideas that came was maybe a retail incubation or going downtown with some collaborative workspace,” said Hoiseth. “And maybe working on things that could help our downtown revitalization and other places that business could use a hand.”
Prior to the meeting going off track, the City Council and CHEDA Board of Commissioners were productive is developing some focal points for spending the $350,000. “We had a really good discussion about the $350,000 that was allocated late last year,” said Hoiseth. “And essentially trying to prioritize what we should do strategically as a community to invest those funds properly. One thing that came out was that we need to work on our workforce development. Those issues that we call workforce development are child care, housing, and training. Those three things envelop our workforce and development of the workforce. Those are the obstacles, the challenges and those are some of the priorities listed tonight.”
