$250K City loan approved, with the same unique terms as CHEDA loan approved in late January
After receiving a $50,000 CHEDA loan late last month, developer Jeff Evers, who bought the historic Fournet building in downtown Crookston in 2016 and wants to redevelop it, on Thursday received approval from the City’s Development Policy & Review Committee on a $250,000 loan.
After floating various proposals to City and CHEDA officials for more than a year, the package Evers finally put together is one that it appears the powers-that-be can stomach. At its heart is an $800,000 loan from Bremer Bank, which CHEDA Executive Director Craig Hoiseth said has been pre-approved verbally. Once that loan is confirmed and various other hurdles relating to architectural estimates, design costs and any environmental issues, the $50,000 from CHEDA and $250,000 from the City will be disseminated.
The terms for both loans are unlike any terms CHEDA or the City has green-lighted before. In order to let Evers tackle paying off the $800,000 to Bremer first, the CHEDA and City loans totaling $300,000 will carry a mere 1 percent interest rate for their first ten years, during which Evers will make only interest payments. Starting in the eleventh year and continuing for the final five years of the loan, Evers will make principle payments at an interest rate not to exceed the prime rate.
Key to the deal is Tri-Valley Opportunity Council, which is looking to move across the street into the Fournet because Tri-Valley leadership has determined that their current home at the northeast corner of Broadway and Robert Street is not viable for the long term, mostly because maintenance, repair and improvement costs are not feasible.
The first phase of Evers’ project would predominantly involve renovating the second floor of the Fournet for Tri-Valley. The $300,000 from CHEDA and the City would essentially go toward the installation of an elevator and the restoration of the iconic skylights on top of the building. Future phases could involve a retail development on the first floor and a redeveloped third floor, Hoiseth said Thursday, and he noted that the City and CHEDA have expressed a general willingness to Evers to consider similar lending terms in the future for future phases – assuming he successfully pays off the current loans – but not if any first or third floor projects are “speculative” in nature.
“We would need confirmed tenants and nothing that may or may not happen,” Hoiseth told the committee.
But, for now, the focus is on the first phase. Evers had a six-month window to secure the deal so Tri-Valley could move, but that expired months ago. However, Tri-Valley Board member Gary Willhite, speaking to the CHEDA Board last month, said Tri-Valley still would like to make the move and would sign a 10-year lease with Evers.
Evers, who lists his address as Hudson, Wisconsin, is quite a mover and shaker when it comes to owning and developing property in Crookston and elsewhere. But the Fournet building project is the biggest development he’s ever taken on.
“This is positive for Jeff, but it’s a bigger positive for the community,” Hoiseth said. “Significant money is being invested in this building, and without it its future would certainly be uncertain. This is a big one for Jeff and it’s stretching him a bit, but he’s been doing some good stuff in this town. It’s cool.”
Evers told the Times Thursday it’s exciting that actual construction at the Fournet is inching ever closer to commencing. When his earlier proposals were shot down, he wasn’t shy about expressing his disappointment. But on Thursday, Evers was happy, and grateful.
“I appreciate Craig (Hoiseth) continuing to work on this, as I really believed it was hopeless a couple months ago,” he said. “Tri-Valley’s support as an anchor tenant has been a key and is much appreciated.”