Hoiseth: Committee says nothing less than full monthly payments will be accepted from here on out.
It's come to this: After several conversations at numerous meetings over the years, city officials have decided that this week's Development Policy and Review Committee meeting will be the last one at which they discuss their continued concerns with Siegle Sports' finances. If owner Tyson Siegle fails to make the full monthly loan payment he owes to the city's Intermediary Relending Program (IRP) – the next payment is due Jan. 17, 2014 – the loan will be called in.
"No wiggle room," CHEDA Executive Director Craig Hoiseth told the Times. "And the committee agreed to no more meetings; such lack of payment will trigger immediate forwarding to the council."
The committee met because of a positive development; Siegle last week paid off a $20,000 loan from the Crookston Housing & Economic Development Authority that originated in 2007 with a 7.25 percent interest rate. "We are hopeful that the retirement of the CHEDA loan will provide him a cash flow boost that can be directed toward the IRP loan," Hoiseth said.
The IRP loan was made to Siegle in 2004 for $100,000, at 5 percent interest. The remaining balance, Hoiseth said, is $60,500. The monthly payment is just over $1,000, he said, which would leave five years to pay it off, assuming there are no interruptions to the payment schedule.
And if the longtime South Broadway sports equipment and apparel store is to remain open, there must be no payment interruptions, the committee concluded, acting on Hoiseth's recommendation to not immediately call in the loan.
"However, the motion that did get approved had some teeth to it," Hoiseth said, adding that, while no IRP loan payments are due in November or December, "there is no more leniency" regarding the January payment or those due thereafter. Nothing less than the full monthly payments will be acceptable, he said.
City Finance Director Angel Hoeffner said the 2004 loan was rewritten in 2009, and Siegle's payments have decreased since 2010.
City officials at various meetings over the years have voiced their concerns about the prospects of Siegle Sports paying off its debts. Hoiseth said it's about finding a balance between being responsible to the taxpayers and USDA Rural Development – whose contributions help make it possible for the city to operate a revolving loan fund – and giving a local business every reasonable chance to succeed.
"CHEDA and the city have done everything we possibly can do to assist Siegle Sports along the way, and to demonstrate patience if a business in town is struggling," Hoiseth said.