News Column

East Grand Forks council: Loan, EDHA still a focus

June 1, 2014

By John Hageman, Grand Forks Herald



June 01--Greg Leigh hears about it around town, whether he's at the store or the gas station.

The East Grand Forks City Council member said constituents have been voicing their frustration over the revelation that a $510,000 city economic development loan had gone unpaid for more than a decade.

"They want some kind assurance from this body and the council that we are, in fact, working on this," Leigh said during a recent Economic Development and Housing Authority board meeting. "But I try to explain that there's a process to this whole thing and it isn't going to happen overnight."

Other council members have also heard from a number of constituents since it was revealed in late April that annual $30,000 loan repayments from Boardwalk Enterprises haven't come to the city, even though they were supposed to start in 2003. Some residents came to ask questions during a recent City Council meeting.

"I think the important thing for the constituents is to keep communicating with them to reassure them that it's not just going to be dropped," said City Council President Craig Buckalew. "And it definitely won't be. It's definitely a bright shining star in the sky."

The loan was part of a state-funded flood recovery program, according to an audit report released last week. It was used to construct the building that now houses the Boardwalk Bar and Grill and Drunken Noodle/Little Bangkok restaurants.

A few months

City officials have held a closed-door meeting with Boardwalk Enterprises representatives in early May, and are trying to set up another. Still, City Administrator David Murphy said during an EDHA board meeting last Tuesday that it may take a few months before the unpaid loan issue is resolved.

Murphy said Friday that city officials are trying to determine the best way to recoup loan payments.

"We're trying to figure out what our most viable option is," he said.

Dan Stauss, the brother of East Grand Forks Mayor Lynn Stauss, has been listed as a partner in Boardwalk Enterprises, but the mayor has said he didn't know about the loan and is not involved with Boardwalk. North Dakota Secretary of State filings show Mayor Stauss was a secretary/treasurer in Grand Forks-based Hampton Corporation Inc. as of last year, with its president being Dan Stauss.

Efforts to contact Mayor Stauss late this week were unsuccessful, but he said after a City Council meeting earlier this month that he "hears a lot of rumors."

"I'm learning for the first time (about the outstanding loan), as the other council members are," he added.

Buckalew said Mayor Stauss is "not a stockholder" in Boardwalk.

"I can't speak for him, all I can say is he's not a stockholder so he's not involved," he said.

Dan Stauss did not return a message Friday.

Audit

Meanwhile, an independent audit report that was made public last week pointed to questions with other loans and EDHA processes, and recommended putting written procedures in place for reviewing, approving and monitoring loans. Murphy said they've already implemented recommendations from Abdo Eick & Meyers, an Edina, Minn.-based public accounting and consulting firm.

Murphy also said last week he will research the possibility of contracting out the housing duties of the EDHA, while keeping economic development a city function. The department has been led by Murphy and city staffers Nancy Ellis and Karen Lukasz since the retirement of Jim Richter, the EDHA's former executive director, earlier this month.

"Whether we change the structure of the (EDHA) is yet to be seen," Buckalew said. "I think everything right now is open for conversation, as it should be."

City Council member Henry Tweten said the City Council is going to be more aware of loans in the future.

"It's going to be closely monitored," he said. Tweten added that council members aren't "holding back any information, contrary to what some people might say."

"We're not sweeping anything under the rug," Tweten said. "I wouldn't go for that."

Murphy went on the radio Friday to take calls from residents regarding the EDHA and the unpaid loan.

"All we can do now is move forward now and correct the mistakes that have been made in the past," Leigh said.

___

(c)2014 the Grand Forks Herald (Grand Forks, N.D.)

Visit the Grand Forks Herald (Grand Forks, N.D.) at www.grandforksherald.com

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Source: Grand Forks Herald (ND)


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