At its heart are two loans over two phases that total $750K; he wouldn’t make any payments for first 20 years
Jeff Evers considers this progress, or at least a step in the right direction.
The developer who owns several Crookston properties, predominantly downtown, including the historic Fournet building that he purchased last year, earlier this summer submitted a proposal to the Crookston Housing & Economic Development Authority (CHEDA) Board of Directors for financial assistance to help him redevelop the building at the corner of North Broadway and Robert Street. At the heart of the proposal, which CHEDA Board members and Crookston City Council members on the CHEDA Board at the time said was lacked detail and other necessary specifics, was just under $300,000 from the City that would essentially be a gift or grant put toward Evers’ efforts at the Fournet. The CHEDA Board rejected the idea months after Evers informally discussed with the council his potential plans before putting a proposal and/or request together, and once the CHEDA Board turned him down, Evers’ plans never went back before the council.
Until Monday night. This time, Evers went to the council first, with what he’s calling his “final” attempt for a City “incentive.” This time, however, his proposal wasn’t immediately rejected. Instead, Mayor Wayne Melbye suggested that a joint meeting of the council and CHEDA Board be scheduled sometime before the CHEDA Board meets during the third week of September. Although nothing was officially scheduled Monday, it’s possible that the joint meeting will take place Monday morning, Sept. 11.
If Evers’ plans for the Fournet are to reach anywhere near their full potential, he needs revenue from an anchor tenant. Tri-Valley Opportunity Council, currently located across the street from the Fournet building but looking for a more desirable and financially feasible home, has said it will become that second-floor anchor tenant, but earlier this summer it put Evers on a six-month clock to get a deal done, otherwise Tri-Valley would move onto other relocation options, or stay where it’s at.
In his final pitch, Evers asks for a $500,000 first phase loan, this fall, which would help finance work on the building’s shell, the installation of an elevator, and fixing the skylights. A $250,000 second phase loan in the spring of 2018 would be invested in improvements to the first floor (commercial level) and third floor. Evers has no specific tenants or development plans for those two floors, but he said the second-phase loan would help him get those floors ready in quicker fashion for occupants.
Those two loans would have a 1 percent interest rate for 20 years, and Evers would make no payments over that time. That’s because, he told the Times, virtually all of the cash flow over those 20 years would go to his primary bank loan. While he’s still waiting for an appraisal to be completed, he said he’s estimating a phase one bank loan of $700,000 and a phase two bank loan of up to $1 million, for a project totaling around $2.4 million.
From the 20th to the 30th year of the term, Evers proposes to repay the City/CHEDA in full, at 3 percent interest. He estimates a monthly payment of $8,690 over the 10 years, for a total repayment of $1,042,800.
As was the case in his first proposal, his package also includes a 20-year tax-increment financing (TIF) district. “It doesn’t cost the City anything, as the taxes stay at the same rate they currently are now,” he explained.
Also remaining from the previous proposal is space in the renovated Fournet building for CHEDA/the City to use for community meetings or gatherings, free of charge. Over 10 years, Evers estimates that as a $100,000 value.
Evers knows the clock is ticking for Tri-Valley to be his anchor tenant. The time element, plus low interest rates, makes it a great time to move forward, he said.
If his final attempt for an incentive package is denied, Evers said he will focus on other buildings he owns, and would consider donating the Fournet and land.
“I think (Evers) needs to go through the CHEDA (loan) process, because if I need a loan from the bank I have to produce a whole lot of documentation to see if I can get it,” At Large Council Member Bob Quanrud said. “I like the idea (of a joint meeting), but CHEDA is going to need a lot of financials and other information.”
Melbye said the joint meeting wouldn’t necessarily include a final yes or not vote. “We’d just be determining if we continue to go forward, or back away,” he said.