5-3 council vote changes CHEDA, puts Hoiseth's position in doubt; HRA remains

New CHEDA Board comprised of council members will likely meet soon, most likely to retain current CHEDA housing staff, and also address Hoiseth's position as CHEDA executive director

Mike Christopherson

The Crookston City Council on a 5-3 vote Monday evening approved a resolution that significantly changes the Crookston Housing and Economic Development Authority (CHEDA), changes that took effect Tuesday, July 13, but doesn’t dissolve it, as City Administrator Amy Finch initially proposed in late May.

Before the vote, City Attorney Corky Reynolds reiterated that the resolution only changes two primary things. For one, if there are indeed economic development-related powers that CHEDA possesses and the city council does not that will need to be exercised from time to time, the city council will need to consent beforehand to the CHEDA Board of Directors exercising those powers. Two, the current seven-member CHEDA Board will be immediately replaced by seven city council members. If, over time, the council decides that it would like to reduce the number of council members on the board with appointed community members, the council will have the opportunity to do so.

Voting yes were council members Wayne Melbye, Kristie Jerde, Clayton Briggs, Don Cavalier and Dylane Klatt. Voting no were council members Steve Erickson, Joe Kresl and Tom Vedbraaten.

It’s likely that the new CHEDA Board made up of council members will call a special CHEDA Board meeting in the coming days to address the future of current CHEDA staff members and CHEDA Executive Director Craig Hoiseth. While saying the final decision will be made by the new CHEDA Board, Finch said it is not her recommendation to eliminate current CHEDA staff that primarily fulfill duties related to the housing and redevelopment authority mission of CHEDA.

As for Hoiseth’s future, one portion of Finch’s initial proposal that carried forward was creating a City-run Community Development Department at city hall, which will be run by a community development director. In order to align the dollars necessary to make that happen, the resolution the council approved Monday eliminates City funding to CHEDA for economic development purposes, meaning, as Finch has stated previously and reiterated Monday, doesn’t leave enough money in the budget to fund both a community development director and a CHEDA executive director. Finch recommended that the newly comprised CHEDA Board also address Hoiseth’s position when the time comes for the board to meet.

After the 5-3 vote, the council unanimously approved a resolution appointing the new CHEDA Board, and they unanimously approved, after a second reading, an ordinance change allowing for the creation of the City-run Community Development Department. Finch said discussions will soon commence on the make-up of a community development advisory committee.

Before the vote on appointing the new CHEDA Board, Erickson, also a member of the CHEDA Board that was nixed in the resolution approved 5-3, said he voted against the resolution because he thinks there should be a mix of council members and community members on the new CHEDA Board. “We just threw pillars of the community out the door,” he said. “They’re great people, with a great business sense. They volunteered their time for zero payment.” Every City board and commission has community members on it, Erickson continued, adding that a CHEDA Board composed of only council members will decrease transparency with the community.

To that, Jerde confirmed with Finch that the new CHEDA Board will deal mostly with housing-related issues unless a situation arises where CHEDA needs to exercise certain economic development-related powers and gets the green light from the council to do so. When it comes to economic development, that’s going to be the primary mission of the Community Development Department, Jerde noted.

At that point, Finch, who said she wasn’t planning on mentioning it going into Monday’s meeting, said that on June 28 she sent an email to CHEDA Board President Kurt Heldstab and copied Mayor Dale Stainbrook. In the email, Finch said she offered to have some sort of mix of council members and community members on a modified CHEDA Board going forward, a mix that she said could be determined through continued discussions. But she said she received no response from Heldstab. Asked by Klatt if they had been alerted to Finch’s email, Erickson and Vedbraaten, also a current CHEDA Board member, said they had not.

“You were kept in the dark on that,” Klatt said.

Melbye said whether it’s community perception or reality, there’s a belief that the current CHEDA Board isn’t notified of certain things, and that if Hoiseth and/or Heldstab don’t look favorably on something, it’s not brought to the board. Melbye said people in the community think if certain people are related to certain people or have certain connections, they have a better chance of having a successful outcome with CHEDA. Melbye noted comments earlier in the meeting by CHEDA Board member Paul Eickhof, who said he was unaware of concerns or complaints about CHEDA or problems with CHEDA until very recently. “The CHEDA Board has never heard of this before?” Melbye said. He went on to stress that the council members on the new CHEDA Board will sit down and look at what’s worked and what hasn’t worked and work forward from there, and that could involve returning community members to the CHEDA Board at some point.

“We all want the same thing, we all want what’s best for Crookston,” Melbye said. “So let’s show it, let’s take the bull by the horns. It took this shock and awe type of a situation here in order to get you folks (CHEDA Board members) down here (to the city hall council chambers) and give your board some realization of what’s going on.” Through different mayors and different administrators in recent years, the same discussions about CHEDA have taken place, Melbye added, “And gone nowhere.”

Public hearing before vote

    At the public hearing prior to the vote on the resolution, CHEDA critics and CHEDA proponents had their say at the podium. The hearing began with Preston Hoiseth, Craig Hoiseth’s son and the pastor at Bible Baptist Church, wishing the council and administration strength and guidance as they make important decisions, including the decision facing them later on Monday’s agenda. After suggesting that the council open all of its meetings with a prayer, Hoiseth then recited a prayer in front of the full council chambers, and in the prayer, amid other positive comments, said that the council would have to justify their actions to god later.

    After the prayer, former City Information Technology Director Philip Barton, who resigned several months ago, said he wasn’t planning to speak at the hearing but felt compelled to after Preston Hoiseth’s remarks and prayer. Barton said he’s an atheist, and that the “Invocation of a god in this room has no place.” He then reminded the council that they are accountable to the community they represent, not a god.

    The hearing also featured Deputy City Clerk Ashley Rystad reading a letter authored by Shannon Stassen, the former city administrator who gave the council an ultimatum around 18 months ago, that either he go or Hoiseth go. With Hoiseth answering to the CHEDA Board and not the city council, and with the CHEDA Board supporting Hoiseth, Stassen ended up reaching a separation agreement with the City. In the letter, Stassen offered a lengthy list of reasons that, he wrote, CHEDA and Hoiseth are the larger problem in the community, not the City of Crookston or the city council. Stassen also noted the recent City survey, in which only 54 respondents out of 717 indicated that they think CHEDA should remain as is. Such a low level of support of CHEDA is not an indication of the agency’s failure, Stassen wrote, it’s “abysmal.”

    Another official who left predominantly because of CHEDA and Hoiseth, Guy Martin, who resigned as mayor and walked out in the middle of a council meeting only a few months after being elected in 2018, said it’s “Time to get unity back in our city.”

    The hearing featured several speakers in support of CHEDA’s track record and Hoiseth:

    • Developer Bob Herkenhoff said through all of the turnover on the council and city hall, he could “always go to Craig” and that, working with Hoiseth, CHEDA and the City, they created several new residential housing opportunities where there were essentially none. The northeast corner of Crookston is buzzing with new residential housing development entirely because of Herkenhoff’s collaborations with CHEDA and the City.

    “I tell you what, CHEDA went to bat for me or nothing would have been done out there,” Herkenhoff said. “I don’t get it. What are you guys doing? …I understand you’re not happy with CHEDA, but you don’t throw the baby out with the bathwater. It’s an awesome board, and you’re saying ‘We don’t need your opinion.’ …Craig’s good to work with, you know. What you’re doing I think is a slap in the face to all of other people on this board.”

    • Jeff Fagerstrom, of the Northwest Minnesota Housing Cooperative, has worked with CHEDA and the City on residential housing initiatives for 23 years. In that time, he said he’s seen CHEDA have “great successes” and “epic failures.” But that’s the nature of economic development, Fagerstrom said.

    He said Crookston is unique in having an economic development authority separate from the City, but from his perspective as a resident of Thief River Falls, Fagerstrom said he feels that separation is an advantage and makes Crookston unique in a good way. (Stassen had written in his letter that no other comparable city in Minnesota with a similar population has a separate economic development authority because the separation is not productive and causes problems.)

    Fagerstrom mentioned CHEDA stepping in to not only save but revitalize the high school’s Construction Trades program as an example. “What other community does that? No community does that. But Crookston does that,” he said, adding that CHEDA has led numerous efforts to boost the housing stock in Crookston. “I’ve seen CHEDA work honorably, aggressively and swiftly to get housing in the community, like I haven’t seen in other communities,” Fagerstrom noted. “…Don’t forget the good things that have happened. If this is really about replacing the person at the top of CHEDA, I like what was said earlier about the baby and the bathwater. CHEDA is a good thing, it’s a good thing.”

    • To the notion that the whole issue is mostly about removing Hoiseth, Vedbraaten, who’s been on the council for around two decades, said that if the council had fired every person he’d been told over the years by citizens to fire, there would hardly be any City staff left.

    Near the end of the hearing, Melbye said it’s not about saying CHEDA hasn’t done good things. But the “disconnect” needs to be addressed, he added. “The CHEDA Board members saying they haven’t heard anything bad; what does that say about the (CHEDA) leadership?” Melbye said.  He then went on to thank Herkenhoff, saying the housing growth in the northeast corner wouldn’t be happening without him. And Melbye also thanked Eickhof for being “great with what you’ve been given.” But, Melbye added, “We’re just saying we don’t think you’ve been given the whole deal.”