The Crookston Housing and Economic Development Authority (CHEDA) Board met on Tuesday.
Angel Weasner, City of Crookston Finance Director/Interim City Administrator, updated the board on the status of the city’s Business Development Public Infrastructure Grant for the Colburn property. Weasner said she is waiting on city engineer Rich Clauson to send her the final information on the infrastructure to be submitted with the grant. The new application would be for approximately $400-500,000, down from around $900,000. CHEDA Executive Director Craig Hoiseth told the board the request changed because the original plan for the area of the Colborn Property proposed to be occupied by the Ag Innovation Center and Vertical Malt was to have a service road that looped around the area. The new plan is to have a service that dead-ends on the south side towards where Epitome Energy is proposed to develop a biodiesel plant in the future.
The board reviewed a B3 grant application from Irishman’s Shanty owner Paul Gregg. Gregg requested the grant to get a heat pump, new carpeting in the restaurant’s dining room, replace the sidewalks, and purchase a new point of sale system. The base grant is for $3,000, but Gregg qualified for additional grant dollars to do graduating from local schools. “He’s asking for $5,000,” said Hoiseth. “That’s the maximum grant – $1,000 (addition) for being a Crookston High School graduate and $1,000 for being a UMC graduate. He’s going to do about a $12,000 remodel in the restaurant, and the board authorized him for a $5,000 B3 Grant this morning.”
The board also approved a request for an $80,000 loan from Total Lawn Care, owned by Morgan Terpstra, through the USDA Rural Business Development Grant CHEDA was recently awarded. “We applied for a grant with USDA Rural Business Development and were successful in getting a $99,000 grant,” said Hoiseth. “That was to couple with a $100,000 we put in to create a new $200,000 revolving loan fund. So, 50 percent of the loan will be from USDA and 50 percent from CHEDA. It creates great leverage for us and allows for a lower interest rate with Morgan for his business.”
The loan has a seven-year term with a 3.5 percent interest rate. As part of approving the loan, the board rescinded a previous loan approved to Total Lawn Care in June for $60,000. Hoiseth told the board that Terpstra wrote a letter of support as part of CHEDA’s effort to be awarded the USDA grant. Hoiseth also said that the previous loan approved by the board was gap financing on the building, which CHEDA was the second lender on behind the bank. The new loan places CHEDA as the primary lender with the security on the equipment and vehicles being purchased with the loan.
Hoiseth said to transfer the building loan into the USDA program would’ve required an environmental review, but that the USDA had accepted an amended plan to apply the grant to the equipment purchase. “About two months ago, we approved a revolving loan for Morgan’s business to go toward the building of his facility in the industrial park,” said Hoiseth. “That necessitated an environmental review, so rather than spend a few thousand dollars to do that, we rebooted and changed the collateral to some security on equipment and vehicles. That satisfied the USDA, so we’ll be able to issue that new grant at a lower interest rate based on the board’s approval this morning.”
The board was updated on the Oak Court Apartment project, which has fallen a couple of months behind due to COVID-19. “We’re on phase seven and eight of a 10-part project,” said Hoiseth. “We’re just embarking on that now, so in the next couple of months, we’ll finish that, and hopefully, completely wrap up the project by the middle of winter. That’s about a $2.2 million project overall, of which CHEDA had to leverage about $350,000 of our funds. The rest will come from Minnesota Housing for the plumbing project that’s going extremely well. Our residents are doing a good job adapting to the construction, and the staff has done a nice job working through those details. Once we finish the project, we’ll be renting those vacant apartments we’ve been displacing residents into.”
The final update from Hoiseth was on the Construction Trades class at Crookston High School. Hoiseth said that after reviewing the class size, a decision was made to complete the house from last year, which students were unable to work on past mid-March, rather than start a new project. “The school district had a few less students in the Construction Trades class,” said Hoiseth. “So, rather than trying to go into a rehab, or start a new house this fall, we’re going to have them finish up the house on Hoven Lane. And get that ready for marketability this year.”
The board also heard from American Crystal Sugar Company’s Crookston Factory Manager Ryan Wall, who told the board that the sugar beet pre-pile has been going very well and they are scheduled to begin the full harvest at midnight on October 1. Wall also said that they are having more difficulties than usual with staffing and currently they are about 30 employees shy of where they’d like to be for the harvest. Wall said they aren’t getting nearly the applicants they usually do, stating he expected it had something to do with the increased unemployment benefits available due to COVID-19.
The board was also asked to review the preliminary 2021 budget for CHEDA and direct questions to Hoiseth or Board Chairman Kurt Heldstab. The initial budget shows a current deficit of $21,831.53, with total expenses of $1,876,831.53. The majority of the CHEDA budget comes from the U.S. Department of Housing and Urban Development’s Public Housing Program. CHEDA has requested $155,000 from the City of Crookston property tax levy for 2021.
