The Cedar Grove Business Park land was set aside in the 1980s for commercial development. In April 2005, the Cook County – Grand Marais Economic Development Authority (EDA) selected the name Cedar Grove Business Park for the development. Then-Governor Tim Pawlenty visited Cook County for a groundbreaking ceremony in May 2006. At that time there were several reservations to purchase lots and confidence that the EDA would be able to pay the bonds let by the city of Grand Marais for the project. Roads and infrastructure to the park were completed in 2007. Unfortunately most of the lot sales fell through and the city of Grand Marais is now working to find a way to make the bond payments.
At the Tuesday, September 11 meeting of the Cook County – Grand Marais Economic Development Authority (EDA) board members approved an increase to the EDA’s housing program budget and debated the EDA’s obligation to pay the Cedar Grove Business Park bonds.
New motion made for housing program increase
Nancy Grabko of Community Fundraising Solutions (CFS), the company that provides housing program services to the EDA sent a letter to the EDA, board to clarify what she said was a “total misrepresentation of facts.” Grabko wrote, “It has been represented to the County Board that CFS is receiving $2,000 per month to answer the telephone at the EDA offices.”
Grabko said that CFS currently receives $2,950 per month to provide housing administrative services. Of that, Grabko said, $2,000 is paid to Rehab Specialist Steve Grabko. CFS is also paid a mileage stipend of $261 per month. Grabko said the remainder goes toward her operating expenses—accounting services, taxes, training, etc. “As a result,” wrote Grabko, “I have been working for virtually little or no salary for the past 15 months. I take responsibility for that business decision. I am no longer able to continue personally subsidizing the EDA Housing Program.”
Grabko noted that because of “increased EDA successes” regarding its housing program, she has no time for other clients, and explained that is why she sought an increase in her contract for housing administrative services.
Mike Littfin, EDA housing committee chair, said a motion made at last month’s EDA meeting was the “wrong way” to address the increase in the EDA housing budget. He said the “ill-advised” motion, which stated the increase was to “cover the EDA office in the absence of the director at a cost of $2,000 per month,” triggered the county board’s concerns.
Littfin said the bottom line is that CFS is providing more services now than 6 – 8 months ago because of the increased housing and commercial rehab activity in Cook County. He said the CFS contract should have been modified sooner. Littfin distributed CFS’s proposed contract for 2013, which details the services that CFS provides and will continue to provide, as well as the cost of the services, totaling $74,900.
In light of the additional service CFS has been providing, Littfin asked the board if the EDA should cancel the existing CFS contract and adopt the 2013 one now. Board Member Don Davison said they could not do that without knowing what amount the county was going to approve for the EDA levy.
Littfin asked if the board could accept the proposed CFS contract for the remainder of the year to keep the housing program going. Littfin said the new CFS contract numbers are equal to those in the proposed EDA budget for 2013.
Nancy Grabko said the contract should be renegotiated in November or December when the levy number is known, noting that is what has been done in the previous contract years.
The EDA board passed a motion to amend the CFS 2012 contract to reflect the amounts in the proposed 2013 contract for September 11 – December 31, 2012. With that motion, the payment to CFS for housing services was increased from $2,950 (plus the $261 mileage stipend) per month to $6,242 per month.
Business Park bond payments
EDA Board Member Scott Harrison asked if there was a contractual agreement with the city of Grand Marais regarding the EDA’s payment of the bonds for the Cedar Grove Business Park.
Board Member Mike Littfin said there was no written agreement but said the EDA owns the land. He said, “We received grants for engineering and construction of the business park. The city posted the bonds. It was a gentlemen’s agreement. The profit from sale of lots was supposed to pay the bonds let by the city and to go back into the EDA’s coffers for other projects.
“No sales—no profits,” said Littfin.
Board Member Don Davison said, “It’s our project; we can’t just walk away from it.”
Harrison asked why the EDA continues to be involved. Harrison said he had just learned that the city had approached the county requesting money from the EDA levy to cover a portion of the bond costs. “What value do we add to this equation?” asked Harrison.
It was agreed that a meeting of the city, county and EDA should be scheduled to discuss payment of the business park bonds.
In other business
. Scott Harrison asked the board to review the EDA mission statement. He said he did not think the mission statement reflected the EDA’s current mission, noting that the mission statement’s primary focus is diversifying Cook County’s economy. Harrison said it is unlikely that the EDA will bring new business to Cook County. He said the EDA should put more of a focus on strengthening existing Cook County businesses. Harrison agreed to draft changes to the mission statement to bring to the next EDA meeting.
. Steve Grabko of Community Fundraising Solutions (CFS) gave an update on the commercial rehab projects. A new round of applications has opened for commercial rehabs in Grand Marais. After the application period closes, the commercial rehab review committee will convene to select projects. The members of the committee are Hal Greenwood, Anna Hamilton, Vicki Wenz and Jan Sivertson.
.The board discussed whether and when it should hire a director. Board Chair Mark Sandbo said the budgeted amount for an EDA director is only $36,000, which is not enough for a full-time director. Hal Greenwood said even if the EDA hired a director, there was no money for any projects. Scott Harrison said the $36,000 could be allocated to hire an independent contractor. The board agreed they needed someone available to help people interested in establishing a business in Cook County. Harrison suggested working with NorthSpan and the University of MN. A motion passed to have Harrison contact NorthSpan to have the company handle EDA business inquires as needed.
Leave a Reply