The Crookston City Council met on Monday night holding public hearings for both the issuance of revenue bonds for the proposed project by RiverView Healthcare Association and the proposed TIF District 3-11 for the Fournet building.
During the public hearing for the RiverView bonds, councilman Tom Vedbraaten asked if bonding the full RiverView project would tie up the City of Crookston from doing any other bonding for the entire year. It was explained that the proposed bonds for RiverView are bank-qualified bonds, but the City would have other types of bonding available in 2019 if needed.
There was some question as to the amount of the bonding support that could be provided. The City is capped at providing $10 million explained City of Crookston Finance Director Angel Weasner, but RiverView can use the City’s tax-exempt status for their full project. “We are assisting RiverView Health in letting them do some bond issuance for the new hospital up to $50 million,” said Weasner. “The City has a cap at $10 million, but the hospital is able to do $50 million. There is a different statute that is being referenced that will allow them to issue all $50 million tax-exempt.”
During the TIF District hearing, Vedbraaten questioned why the documents were referencing $308,000 when he understood previously the TIF was for around $200,000. Mikaela Huot from Springsted, Inc., and Weasner explained that the term remained the same at $208,000 over 20 years, but Weasner said with inflation and interest the actual number could be close to $308,000. “The TIF district will be $208,000,” said Weasner. “If you take inflation and interest the total could be $308,000.”
The board then approved the creation of the TIF district which will allow Jeff Evers to begin getting permits for the construction on the Fournet building, but they are holding off on the agreement until a later date explains Weasner. “At this time they have set the TIF district plan in place,” said Weasner. “The building itself will be in a TIF District so we can move forward at a later date once he gets the information to us like a policy of insurance and any other financing. We will then be able to get a redevelopment agreement where we both agree on terms and can get it certified by the county at a later date.”
Vedbraaten made the motion to table the development agreement. He was concerned that the City still had not received a life insurance policy covering a loan of $250,000 to Evers the council had previously approved. “I had found out a while back that we hadn’t gotten the life insurance policy on the loan we had given him,” said Vedbraaten. “I checked this morning and we still hadn’t gotten it. That is something we should have. These things should be all done before we do it.”
Councilman Jake Fee asked if the loan wasn’t approved without the TIF and Crookston Housing and Economic Authority Executive Director explained that the project was not feasible without both the loan and TIF district being established. Hoiseth said the loans hadn’t been issued to Evers yet because the life insurance policy was not yet issued. However, Vedbraaten said after the meeting he believed Hoiseth was referring to a separate $50,000 loan from CHEDA, not the $250,000 loan from the council. “There is $50,000 loan from CHEDA and a $250,000 from IRP, that’s my understanding,” said Vedbraaten. “CHEDA hasn’t given the $50,000 because he hasn’t gotten the life insurance yet. We were told at one time all this was done and that’s why we approved the loan. That needs to be done before we go any further as far as I’m concerned.”
Once Evers has all the documents the City has asked for regarding the loan such as the life insurance policy, they will readdress the development agreement. The final process relating to the TIF district was the approval of an interfund loan for costs associated with the TIF district. Councilman Bobby Baird asked who was paying for the costs. Weasner said the interfund loan, which was approved, is set up to protect the City to recoup any additional costs associated with the TIF district. “In order for the City to recoup any of the funds that are expended after the $8,500 developer fee is used up we need to have an interfund loan agreement in place,” said Weasner. “We are just protecting ourselves by having this in place in case there are any additional monies that need to be spent, we can recoup that money back.”
