East Grand Forks will provide a loan of $ 149,999 for a furniture store in the former Shopko building

0
35

[ad_1]

On Tuesday, the City of East Grand Forks voted 6-1 to approve a $ 149,999 loan to St. Michel Rental, LLC for the purchase and renovation of a building. former Shopko building on the gateway drive. The city’s economic development department approved the plan earlier in the day. Councilor Clarence Vetter was the only one who voted against the plan.

The company intends to split the building into two segments: a 10,000-square-foot retail space, whose tenant has yet to be identified, according to documents provided to councilors, and a 31,000-square-foot furniture store, “to be announced at a later date.”

On paper, it seems clear that most of the building will be the fifth in the St. Michel located in Rugby, Bottino, Devils Lake and Bemidji, Minnesota. From the names, government assets, and commercial records, St. Michel Rental also owns the land on which the Bemidji store is located, and its main address is the same as that of the Rugby North Dakota store. Rugby is owned by St. Michel Furniture, Inc., of which Robert Saint-Michel is the registered agent, who is the same person as the manager of the Bemidji store and the owner of the rental company.

But Paul Gorte, director of economic development for East Grand Forks, said that while Robert Saint-Michel owns several furniture stores, the one he is working on in the old Shopko neighborhood may not belong to the Saint-Michel brand.

“He’s negotiating with someone with a recognizable name on the store, not Saint Michel,” Gorte said. “He can use it as a kind of franchise.”

It was not possible to reach Saint-Michel himself for comment after Tuesday’s meeting, as did Ethan Saint-Michel, who is listed as the registered agent of the rental company in Minnesota’s business documents.

According to City Attorney Ron Galstad, the loan itself lacks a dollar of $ 150,000 because Minnesota law classifies any loan equal to or above that threshold with an interest rate below market as a business subsidy. The interest rate on the loan to St. Michel Rental is 4% for 10 years. According to Galstad, the market rate is 5%.

“As a subsidy for a business, it takes a lot more details, it takes a lot more work, and in this case it is not a grant, we are not giving out money. This is actually a loan that needs to be repaid, ”Glastad told Council members. “So the real difference is in the amount of limited interest. Five, six thousand dollars over the term of the loan. And from an economic point of view, it makes no sense for the city and the company to classify this as a business subsidy. “

Councilor Vetter, who voted against the Saint-Michel loan, objected to the owner of the building asking for the loan, not the furniture store company itself.

“The furniture store might be abandoning before this deal is finalized, or they might be backing out in a year or so, and we still don’t have new employees in town, then?” he asked Gorte pointedly.

According to Gorte, the store could, and the company asked for a lease rather than a store, because the loan would be used to buy and renovate the building and secure the mortgage.

“I just don’t want to create a precedent,” Vetter said. “I don’t think we are in the business of lending to people to buy real estate. We are in the business of opening new businesses in the city. “

According to city documents, the purchase and renovation will cost $ 2.32 million. Of this amount, Saint-Michel intends to borrow $ 2 million from other creditors and invest $ 150,000 himself. Saint-Michel claimed there would be seven full-time jobs in the store.

Center for the Integration of New Americans, 10th Street Renovation

In related news, Council members:

  • Were briefed on the Center for the Integration of New Americans, which seeks to bridge the gap that sometimes arises between longtime, predominantly white, East Grand Forks residents and immigrants, many of whom are not whites. Among other things, the center offers transfers, childcare and other services to people who have recently moved to the United States.
  • Steve Emery, an urban engineering contractor, was given the go-ahead to authorize his firm to prepare a “feasibility report” for Reconstruction project of 10th street North-East In April, the City chose to build a roundabout on Rheinhart Drive due to a long-standing plan. This study will lead to sharper estimates of the project’s cost, determine how much nearby property owners such as Burlington, the Northern Santa Fe Railroad, and American Crystal Sugar will pay on a special valuation, and so on.

[ad_2]

Source link