“ If there were lot sales, we would not need a levy increase this year. But we absolutely cannot default on those bond payments. ”
At its August meeting, the Cook County – Grand Marais Economic Development Authority (EDA) tackled a number of difficult financial issues and heard a report from the UMD Center for Economic Development that reiterated its financial pressures.
Levy advance needed
for continued operation
In July, the EDA agreed to approach the Cook County board of commissioners to request for a $32,500 advance on its November 2010 levy. After the bills were paid in August, Board Member Bruce Martinson noted that after bills were paid, the EDA had a balance of only $7,762. He again recommended that since the EDA would be getting $74,000 in November, it should ask for an advance on its levy now. A unanimous levy vote passed to ask the county for a levy advance.
Levy increase sought for next year
Speaking for the EDA budget committee, Board Member Don Davison pointed out that $135,000 of the EDA’s budget goes to pay the bonds at Cedar Grove Business Park. Since business park lot sales are not known—and potentially unlikely in the current economic climate—Davison suggested that the EDA ask the Cook County commissioners to approve a supplemental levy this year. “If there were lot sales, we would not need a levy increase this year. But we absolutely cannot default on those bond payments,” said Davison.
Board Member Mark Sandbo said when the EDA budget was cut to the “bare bones,” that leaves no money for marketing, for projects, or to pay its director. Board Chair Mike Littfin said, “We need to find a way to bring the director back to full-time. If we don’t have a full-time director, we really don’t have a director at all. If we don’t have a director, we may have money for projects—but we wouldn’t have anyone to do the work.”
Board Member Jan Sivertson asked if the EDA should ask for the maximum
levy it is allowed—$
286,000. Martinson,
who is also a county commissioner, said it would be a hard enough “sell” as it is. Littfin said the EDA should ask for a levy of $267,500.
Littfin also suggested approaching the city of Grand Marais to help the EDA in its financial crisis by allowing the EDA use of its office space and staff assistance at no charge. “Yes, they are on the hook because of the business park bonds, but we are going to bat for them, to help with the bonding,” said Littfin.
Martinson asked if Director Matt Geretschlaeger would rescind his resignation if the levy increase was approved. Geretschlaeger said, “I said I intend
to resign January 1.”
Littfin said, “We’ve had discussions. If we can get Matt back to full-time, he will stay.”
Don Davison then made a motion to approve the 2011 budget with a proposed levy of $267,081 adding a request to the city to forgive the EDA’s office support costs and rental. The motion carried, with Mark Sandbo, Jim Hall, Hal Greenwood, Jan Sivertson, Don Davison and Mike Littfin, voting in favor and Bruce Martinson voting against.
Funding for final paving needed
Director Geretschlaeger presented the estimate from Short, Elliot, Hendrickson (SHE) Engineering for the final bituminous paving of the Cedar Grove Business Park. SEH estimates that the project will be $159,940, which is about $50,000 more than the EDA has reserved for the project. However, Geretschlaeger said there are contractors doing paving in the area that may be able to do the work for less. He suggested advertising for bids to see the results. A unanimous motion passed directing Geretschlaeger to seek bids.
The board also continued its on-going discussion regarding the EDA’s wetland credits. Martinson asked if the EDA could sell the credits to help pay for the bituminous paving. Cook County could use the wetlands credit in the future for the possible runway extension at the airport. Hal Greenwood made a motion to offer the wetland credits for sale to the county. However, he said if the county doesn’t want them, the EDA should seek another buyer. The motion carried unanimously.
UMD presents marketing plan
Christo Roberts and Kenneth Johnson of the UMD Center for Economic Development gave a preliminary report on what they have learned about the business park. Roberts said simply, “Theproblem is business park lots are slow. The best thing the community can do is divest itself of the business park—either by sale of lots or direct sale of the land.”
Roberts and Johnson presented a tentative marketing plan to sell lots through a three pronged strategy: proactive marketing strategies, establishing a presence at regional and national trade shows; and by creating a business incubator to groom businesses not quite ready for the business park.
” The UMD specialists said the EDA needs to market the tangibles (the land) and the intangibles (the natural beauty of this area). Robertson said the EDA is a hidden treasure that needs to be made known. Roberts and Johnson gave suggestions for promotional strategies—long range, such as attendance at national trade shows and advertising in trade journals— and short range, such as attending the upcoming Entrepreneurs Exposition in Fargo, North Dakota.
“You can have the best product in the world, but if no one knows about it, no one is going to buy,” said Roberts.
Roberts stressed that the EDA website should be upgraded. He said the website needs detailed, specific, information. “As someone looking for a place to build a business, if you can’t give me the basic information, I’m not even going to go any further. I want to know the slope of the lot and about the entrance to the lot—it makes a difference to me if I enter the lot on the east, west, north or south. I need all the information I can get before I come to Grand Marais to look.”
Roberts grinned and added, “Maybe you could add a panoramic 360 view feature of the business park. “We drove through the business park and we were really, really impressed. It is a beautiful situation. This business park looks very, very, different. It doesn’t look like a business park in Minneapolis that could be anywhere. Thisis a beautiful, scenic, area.”
“It costs a lot of cash to do what you are talking about,” said Geretschlaeger.
“You have an asset worth $2 million,” replied Roberts.
“So what you are saying is—if we do nothing, we’re going to lose?” said Geretschlaeger.
Roberts nodded, “If you are not more proactive, you’ll be sitting on lots for many, many, more years. You do not want that. Whatever you do, do something— do something to sell five lots in the next year.”
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