CHEDA Board considers monthly stipend for business looking to relocate to larger, remodeled downtown space
A majority of Crookston Housing & Economic Development Authority (CHEDA) Board members on Tuesday seemed to be in a favor of a proposal put forth by CHEDA Executive Director Craig Hoiseth to provide a direct subsidy in the form of a monthly stipend over a period of one year to a local business looking to move downtown to a larger location, but they agreed to wait until the board’s May meeting before taking action.
“I think we should take 30 days, get it out in the public and make a decision next month,” CHEDA Board member Craig Morgan said.
In addition, the board advised Hoiseth to spend some time over the next month putting together specific criteria and other guidelines and requirements for such a stipend program, assuming that the monthly stipend being proposed for Sweetlight Photographic Images, owned and operated by Andy Hall of Climax, spurs similar requests from businesses in the future.
The Times profiled Hall and his business in December 2016. He’d been in business for a couple years at that time and was poised to start welcoming customers to his location near the University Avenue curve, in the former Real Estate Place location. Hall takes outdoor photos of nature and buildings, enhances them to varying degrees, frames them and sells them. He does much of his business on the road as he travels to various shows, but he’s hoping to grow in-store sales in his store/gallery.
Last month, Hoiseth told his board that Hall was becoming more cramped at his current location and was looking for something larger in town. He’d looked at several locations and was having a hard time finding a spatial fit as well as a financial fit. With so many efforts underway to boost downtown activity, Hoiseth said finding a downtown home for Hall’s business was preferred but not absolutely necessary. Hoiseth also floated the possibility of moving Sweetlight Photographic Images to Valley Technology Park, home to various “primary” business tenants as well as fledgling, start-up business tenants that are being “incubated” there with the idea of expanding elsewhere at some point in the future. (CHEDA is located at VTP and is the landlord.) But since Hall was already somewhat established, Hoiseth and the board agreed that moving him to the VTP bay formerly occupied by Functionally Fit, which recently moved downtown, just didn’t seem right.
Since Hall lives in Climax and could just as easily commute to his business in, say, Grand Forks or East Grand Forks, Hoiseth said last month that there was a bit of extra motivation to try to find a location solution for Sweetlight Photographic Images somewhere in Crookston.
Doable option emerges
Hoiseth, noting that in his most recent performance evaluation, the board suggested that he find creative ways to support businesses, such as a stipend, said such a direct subsidy to Hall’s business would be a first in Crookston. But, he said, Hall has a motivated developer/landlord in Jeff Evers, who recently purchased the Fournet Building downtown and owns several other properties in Crookston.
Under the proposal, Sweetlight Photographic Images would relocate to the space between the former Carquest Auto Parts building – which Evers owns – and We Clik Photography on South Main. Evers would invest $20,000 to get the space ready, which hasn’t been used for many years and even has a front entrance that’s been bricked-over. Evers would charge Hall $500 a month in rent plus utilities, $100 more than the $400 monthly rent he currently pays, which includes all utilities. What Hoiseth proposed Tuesday is a $250-per-month stipend for Hall to help him cover rent and other expenses at the larger location. The stipend would begin in the summer, when it’s expected Hall would be ready to move in, and would continue for one year, totaling $3,000. At that time, the CHEDA Board would revisit the situation.
“It’s an ideal location, with large windows that could feature lights showing off Andy’s work, and alley access so he can move things in and out,” Hoiseth said. “It would be an experiential-type of business downtown, which is what we want.”
Asked if he’d checked in with We Clik Photography to see how they feel about their potential new neighbor, also in the photography business, Hoiseth said he had not. He stressed that the two would not compete with each other. Hall takes his outdoor photos and sells them in his retail space and all over the country. Unlike We Clik, Hoiseth explained, “I don’t think he’s ever taken a picture of a person.”
No taxpayer dollars would help fund the stipend, he stressed. Instead, revenue from current VTP tenants would provide the necessary dollars. Hoiseth noted that a few years ago, the VTP budget and revenue strategy shifted, at the board’s urging, to an approach that stresses a balanced budget more than ever, and, hopefully, a profit. As a result, the VTP’s budget is in the black, Hoiseth explained, mostly due to monthly rent paid by “primary” tenants who aren’t necessarily being incubated there or looking to move out in the foreseeable future.
“Essentially, this is expanding incubation from (VTP) to downtown,” he said.
Spur similar requests?
Several board members said they assume an approved stipend to Sweetlight Photographic Images will spur other businesses in town to request similar assistance. While that’s not necessarily a bad thing and in fact, Hoiseth noted, is probably a good thing, there was a sense among board members that CHEDA needs to have its ducks in a row when those future requests for financial help in the form of a direct subsidy come forward.
Board member Paul Eickhof suggested that, while specific guidelines for a stipend program might be beneficial, the board might be best served by doing their due diligence and homework when specific requests are made, and make decisions on a case-by-case basis that’s based on a given business’ past and current performance and future outlook, not necessarily just because a business meets a certain set of criteria.
As for the proposed stipend for Hall, Hoiseth said the primary criteria he’s taking into account is that Hall couldn’t consider the move and Evers wouldn’t be poised to remodel the space if Hall doesn’t get the stipend. “This won’t work without us doing this,” Hoiseth said.
If the board OKs the stipend in a month, board members want to see at least a framework of how a stipend program would function in the future, assuming CHEDA is allocating more than one at some point.
“I’m hearing support here, but we need a game plan on how to proceed on things like this in the future,” said board member and city council member Steve Erickson, also a downtown business owner. “We need to know what CHEDA can handle. For $3,000, this is a cheap investment, but we need a plan.”
“I’m having a hard time getting my arms around giving money away, but I guess we’re not totally giving it away; it’s been earned at Valley Tech Park,” Morgan added.
Hoiseth said CHEDA would definitely have to proceed with caution, given the ebbs and flows in VTP’s revenue stream from year to year as tenants fluctuate. “I’m not anticipating big demand, but I think there would be other people who show up and say, ‘I want to be in Crookston but I’d like some kind of direct subsidy to help with that,” he said.
If the board ends up looking favorably on a stipend program, Hoiseth added, another question it will likely need to answer at some point is if it wants such a program limited to downtown, or the entire Crookston business community.