On Monday, October 22, members of the entities that support the Cook County – Grand Marais Economic Development Authority (EDA) and its board members gathered to discuss the future of the authority. For nearly two hours city councilors, county commissioners and EDA board members discussed and debated the EDA budget, the housing program, the Cedar Grove Business Park bonds, the EDA director position and the mission and role of the EDA.
One of the first matters of business was rearranging the agenda to make “mission and role of the EDA” the first topic. Commissioner and EDA Board Member Bruce Martinson said, “Everything else follows that.”
City Councilor Bill Lenz agreed. “I think discussion of the budget should be last as it all depends on discussion of the other matters.”
The group attempted to tackle the EDA’s mission. EDA Board Chair Mark Sandbo read the existing mission statement. City Councilor Tim Kennedy asked how current the mission statement is. EDA Board Member Scott Harrison said that was a good question. He said it needed to be reviewed and revised.
Talk turned to the Cedar Grove Business Park and the difficulty in selling lots and thereby making infrastructure bond payments. Harrison said that under the current contractual agreement with the city on the bonds, the EDA’s “hands are tied.” He said without the ability to negotiate lot prices, the EDA cannot market and sell the lots. He said the EDA should deed the business park over to the city of Grand Marais.
City Administrator Mike Roth was at the meeting and he quickly replied, “No thanks.”
Sandbo said the EDA has an “ethical obligation” to sell the lots to repay the city but noted that is just not happening.
Commissioner Sue Hakes expressed frustration that the EDA has come to the county seeking an increase in its levy without a consistent budget or a plan with some strategies to sell lots and create jobs. “I want to see an updated mission statement and a business plan. If you came to us with a plan, I’d go for it,” said Hakes.
Harrison said that the EDA was waiting for a countywide economic study by the NorthSpan group to be completed.
Grand Marais Mayor Larry “Bear” Carlson said he wanted to bring up the “elephant in the room.” He asked, “With a $200,000 a year budget, can the city or the county afford to have an EDA?”
Harrison replied that the EDA’s housing and commercial rehab program had brought $1.4 million in funding to Cook County. EDA Board Member Mike Littfin concurred, “Prior to that housing program, zero funding was coming to Cook County.”
“But does it have to be an EDA?” asked Carlson.
City Councilor Jan Sivertson said if not the EDA, another entity would have to be created.
Councilor Kennedy said the mayor’s statement was relevant. “If the EDA can’t show what it is doing and how its money is being spent, something needs to be done. But as Scott said, with the study being conducted by the Go Team [a countywide Chamber of Commerce effort] we will find out what changes need to be made. I hope we can find out what we need to do so people can live here, raise families here,” said Kennedy.
Commissioner Hakes said, “Again, I would like to see this plan. I would like to see a firm budget. Every time we see the EDA’s budget it changes.”
Talk again turned to the business park and the problems associated with selling lots and the complicated procedures to discount lots to get a business established and on the tax rolls. Harrison asked if the city would agree to let the EDA sell the business park lots at reduced prices. The board acknowledged that if even one lot sold, it would be something to apply toward the infrastructure bond payments.
Paying the bond payments is another problem. The EDA has no money in its coffers or proposed budget to pay the approximately $120,000 bond payment coming due soon. After extensive discussion, the county and city representatives agreed that they would have to do something to cover the bonds. A tentative agreement was reached for each governmental body to pay $60,000 toward the debt.
There was also consensus to give the EDA authority to work with potential business park tenants to negotiate the best deal possible. Harrison asked, “Can the city remove the hand cuffs?”
City Administrator Mike Roth said there are steps to be taken to change the contractual agreement. He said the bonds were sold with the understanding that the city and EDA had an agreement for repayment when lots sold. That language would have to be changed, he said. It was agreed that the EDA’s contractual agreement for the business park bonds would be put on the agenda at upcoming city and county meetings.
The EDA board agreed to develop a clear plan once the Northspan study is complete. However, Harrison noted, the study will not be complete before the county needs to make its final decision on the EDA levy in December. He said the EDA would appear before the county in December with a revised budget and a summary of the EDA’s vision and its strategy to get there.
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