CHEDA makes counteroffer to City, Hoiseth breaks silence

Hoiseth says he's largely achieved most of his overarching goals, he defends his board, and he says he'll go if they say he needs to go

Mike Christopherson

At a special meeting Tuesday of the Crookston Housing and Economic Development Authority (CHEDA) Board of Directors, the board voted 5-2 in favor of presenting a counteroffer to City Administrator Amy Finch and Mayor Dale Dale Stainbrook to Finch’s proposal to strip CHEDA of some of its powers, immediately replace its board with city council members, eliminate City funding to CHEDA for economic development, create a City-run Community Development Department, and re-establish an independent housing and redevelopment authority.

    At the end of the almost three-hour meeting at Valley Technology Park, it was decided that CHEDA Board President Kurt Heldstab and likely another board member would try to set up a meeting with Finch and Stainbrook prior to Monday, July 12. That’s the date that the council has called for a public hearing – required by statute because it would amend a previous City resolution “enabling” CHEDA – to listen to public feedback on Finch’s proposal, which a “consensus” of council members indicated at a previous council Ways & Means Committee meeting that they could potentially vote in favor of. The latest proposal put forth by Finch, in response to feedback she said she received from council members and the community, is scaled-back from her initial proposal, which sough to dissolve CHEDA entirely and replace it with the City-run Community Development Department run by a director, and re-establish an independent housing and redevelopment authority.

    The hope from the CHEDA Board’s perspective is that a conversation with Finch and Stainbrook – assuming one takes place – would be productive enough to result in at least the postponement of the July 12 public hearing. The CHEDA Board’s counteroffer, Heldstab noted in a letter that will be sent to Finch, wouldn’t require an amendment to the City’s resolution enabling CHEDA, so another public hearing might not even be required. As of now, the July 12 council agenda is expected to include the public hearing, and then later in the agenda, a resolution calling for a council vote on Finch’s proposal.

    Heldstab and board member Craig Buness voted against the counteroffer. Heldstab, who was the predominant author of the three potential counteroffers the CHEDA Board considered Tuesday, said they sounded doable when he talked about them, but once he put them down on paper and read them, he didn’t like any of them anymore.

    “My reason why?” Heldstab said. “Because this is a complete change in format that I would be working under compared to when I first came on. When I first came on, I learned a lot, I learned the (CHEDA) mission of economic development and housing. This changes the whole format I’ve been orientated in, working with great board members previous and current, (CHEDA Executive Director) Craig Hoiseth and the staff. I’m not in favor of moving forward with this.”

    As for Buness, he said he thinks it’s “crazy” that as the saga continues between the City and CHEDA, the CHEDA Board and the city council continue to meet separately in different buildings when they should be sitting down together to hash out the best plan going forward. The CHEDA Board’s counteroffer amounts to little more than “posturing,” Buness said, because city hall “has the control.”

    “I don’t think there’s anything we can necessarily do here that’s going to keep city hall happy,” he continued. “They have a plan, and I think we should just let them do it. They have the control, and they’re going to mold CHEDA into the way they want. …I’m not convinced it’s going to work, but the City’s got the ability to do what they feel they have to do. It’s not that I like it, but I think that’s where it has to go. I don’t see this being productive, personally.”

    Board member Tom Vedbraaten, also a member of the city council, agreed with Buness.

    “The city council has the votes to do this and they’re hell-bent to do it and it’s going to happen,” he said.

    At the heart of the counteroffer is the replacement of the two city council members sitting on the board, Vedbraaten and Steve Erickson, with the mayor and another council member. There was talk about making Stainbrook and the other, as-yet-unnamed council member the president and vice-president of the CHEDA Board, respectively, but that would likely require a change in CHEDA’s bylaws.

    Whether they’re in leadership positions or not, there was positive talk in the Valley Technology Park community room about having the mayor position be an active, voting member of the CHEDA Board. Board member Betty Arvidson, who for many years was the City’s clerk and treasurer and then finance director before taking the chief financial officer position at RiverView Health, said when CHEDA was initially launched, then-Mayor Dave Genereux and then-council member Keith Mykleseth served in leadership roles on the initial board.

    “There was a lot of value in having the mayor as a voting member of CHEDA,” Arvidson recalled. “You really have to be there and live it and breathe it.”

The elephant, the cloud, the shadow

    To notions expressed Tuesday that no compromise the CHEDA Board puts forth would satisfy Finch, Stainbrook or a majority of the council, there were many direct and indirect references made to what might be the biggest issue of all: Hoiseth remaining on the job. Hoiseth continuing on as CHEDA executive director has been previously referred to as the “elephant in the room,” and at Tuesday’s special meeting it was at one point called a “cloud” over CHEDA and at another point a “shadow” behind CHEDA.

    But council member Wayne Melbye was most direct when he said, “Nobody has enough balls to say you have to get rid of Craig Hoiseth.”

    Melbye served three terms on the city council and then was appointed mayor to fill a vacancy. He said he never sought a full term as mayor largely because of the “disconnect” between the City and CHEDA that he said permeated the council at that time, a disconnect he partly attributed to then-council members Bobby Baird and Jake Fee, who were both defeated in the 2020 election. (After two years away from the mayor’s seat and council, Melbye ran against Baird for one of the council’s two at-large seats and was victorious.)

    “To me, that’s pretty much where the disconnect was,” Melbye recalled. “You had people who were total CHEDA who were on the council.

    “I watched with Fee and Baird on the council, I couldn’t get anything through; if I said red, they said green. If I said black, they said white. Most of the bitching came from…it was choosing sides,” he continued. “Somebody pounded a stake in the middle and said either get on this side or that side. And the leadership here didn’t help, either, getting it back together.” Then Melbye contended that when certain CHEDA-related votes would come up at council meetings, he would see Hoiseth either nod or shake his head. “Then I knew where four votes were going,” Melbye said. “I was out for two years, but it didn’t heal.”

    Melbye said it’s sort of the same but maybe less drastic with Vedbraaten and Erickson, whom he contended seem to support CHEDA more than the council and the City.

    “Where’s that disconnect? Who are you representing? What board are you really on?” he wondered. “Most feel on the council that CHEDA definitely has a place in the community, but the way it’s gotten here, there’s definitely something wrong here.”

    Erickson said he was “appalled” and “offended” that Melbye would say such a thing.

    “I’m not strictly CHEDA,” he said. “I look at both sides; I do my homework.”

Hoiseth breaks silence

    After not speaking publicly since Finch’s first proposal was released in late May, Hoiseth interjected his thoughts in sometimes impassioned fashion about an hour into Tuesday’s special meeting. For the most part, he defended his board of directors against criticism from the council that he called “shameful” and questioned the wisdom behind putting forth multiple options to modify CHEDA, but every single option first and foremost removes the current board.

    “Why would all the council options include removing these fine people?” Hoiseth said. “For the life of me, I can’t understand why we sit here and talk about the skill-set and the value of this board, and yet all of the options on the table are to remove this board. …It’s disturbing to me when you take the collective resumes in this room and you want to abandon that in favor of council members who, quite frankly, don’t have the resumes or experience of the people in this room.”

    If the solution is to get rid of him, Hoiseth reiterated that he serves at the “pleasure” of his board, and that if they say he has to go, he’ll go. But, aside from certain things from year to year that he’s told to focus on or improve on, Hoiseth said his board has consistently given him positive annual evaluations.

    “I’m not opposed to a change of leadership at CHEDA, but the board has to say that,” he added. “You know me the best. Other people out there who hardly know us at all are saying we need a change in leadership. But I’m seeing a disconnect with why this board is being replaced.”

    Had the CHEDA Board not held a special meeting in early June to formally oppose Finch’s proposal to dissolve CHEDA, Hoiseth said the council likely would have voted to do just that by mid-June. He thanked his board for having the “fortitude” to “stand up” in opposition, and added that he nor any of his board have yet to see any details on increased efficiencies and cost-savings that Finch mentioned when initially explaining her proposal. Had the CHEDA Board not taken action in opposition to the proposal and had the council subsequently approved it, Hoiseth said it would have been an “embarrassment” to the Crookston community.

Achieved goals

    Around a decade ago, Hoiseth said he consulted with then-Mayor Genereux and then-City Administrator Aaron Parrish and together they came up with six overarching goals for him to pursue. Tuesday, Hoiseth revisited each goal individually, and said for the most part he has achieved or at least partially achieved all of them.

    • The first goal was to elevate the “CHEDA brand”: Not many people know what CHEDA or its mission was all about and how it did its work. Hoiseth said for the most part that’s no longer the case.

    • The second goal was to secure the financing necessary to construct an apartment building and a hotel: The Meadows apartment complex and the Cobblestone Inn have since been constructed, Hoiseth noted.

    • The third goal involved changing the equity position of downtown buildings: With so many buildings being owned by older individuals or families looking for succession plans or people to move into first-floor retail spaces, Hoiseth ran off a list of names of people who have since purchased downtown buildings or at least opened businesses on their main floors. “Lots of people stepped up and, guess what? Goal three is accomplished,” Hoiseth said. “We’re ready for development downtown because of our strategy developed 10 years ago.”

    • The fourth goal was to “save Valley Technology Park”: Hoiseth said he and Parrish disagreed on the fourth goal. VTP, which houses CHEDA and had an initial primary mission as an incubator of new businesses, was as much as $80,000 in debt one year but averaged a deficit of around $30,000 each year for several years. Parrish wanted to rid the City of the building, Hoiseth recalled, adding that he asked for some time to work his plan that focused on getting consistent tenants to rent space at VTP. The result is an annual profit approaching $40,000, Hoiseth said, adding that CHEDA isn’t “sitting” on that money but instead is investing it in various initiatives.

    • The fifth goal was to bring in value-added agricultural development that focused on basic-sector manufacturing and ag value-added jobs: They’re a “heavy lift” to get launched, Hoiseth said, but American Crystal Sugar and Dahlgren and Co. (now SunOpta) in Crookston show that they can have success. “We have grain and soybeans, so we targeted soybeans,” Hoiseth said. The potential result, five years in the making, is the soybean crush and biofuel facility known as Epitome Energy. “It’s our fifth year working on it, but it doesn’t come easy,” he said. Hoiseth added that the $250,000 forgivable loan the City and CHEDA gave to Epitome founder and CEO Dennis Egan to help navigate the arduous permitting process is an “absolute drop in the bucket” compared to the added tax revenue and jobs and families that Epitome would eventually bring to the city, county and school district. The ADM soybean facility being built in North Dakota is getting “ten times” more local financial support than Epitome Energy is, Hoiseth said, adding that “We should be thanking Dennis Egan to high heaven” for his $250,000 asking price.

    Hoiseth in his comments on the fifth goal also mentioned the Ag Innovation Campus, which will start moving dirt later this month on Crookston’s southern edge, as another value-added ag development.

    • The sixth goal, or at least objective, was to “keep the City away from CHEDA”: Hoiseth said Genereux and Parrish were adamant about that. “Business doesn’t want to do business at city hall, they want to do it at an economic development authority,” Hoiseth said.

    “It doesn’t look like I’m going to accomplish goal six,” he continued. “If the board tells me it’s time to go, that’s fine. But I can say that 10 years ago I was charged to do a job and I did it. Some people don’t like me at the end of the day, and I can deal with that.”