Fournet Building subordination approved by Ways & Means Committee

Jess Bengtson
Crookston Times

Crookston City Council's Ways & Means Committee approved a preliminary request from First Community Credit Union for the City and CHEDA (Crookston Housing & Economic Development Authority) to subordinate loans for the Fournet Building in relation to proposed refinancing. Fournet owner Jeff Evers told the Committee after the approval that the project is moving along for its tenants, but the biggest delay was the elevator installation. Evers added that he had to change elevator companies after waiting over a year with no results, but the new elevator provider should have the install complete by April.

The Fournet loan subordination will have the city's $250,000 IRP (Intermediary Relending Program) loan, which is currently in the second position, with interest only payments for the first 10 years at 1% or $2,500 annually followed by principal and interest payments due in years 11-15 with the interest rate determined by prime rate, plus CHEDA's $50,000 loan currently in the third position and CHEDA's $100,000 loan currently in the fourth position. The city would remain in the second position and their legal position would remain unchanged though the debt in front of the city may increase and their financial position could change.

The subordination will go in front of the CHEDA board on January 18 and will return to the City Council at their next meeting.

Fournet atrium