With CHEDA's help, PSF's project at the former Cathedral will get moving again
The stalled project at the former Cathedral in downtown Crookston made possible by a $206,000 state grant through the Legacy Fund will get moving again after the CHEDA Board of Directors on Tuesday approved extending a financial lifeline of sorts to the Prairie Skyline Foundation, led by Kay Hegge since 2003.
With a current outstanding bill to the contractor totaling approximately $27,000 and a second one soon to bring that total to around $47,000, the CHEDA Board approved a resolution that will immediately cover the $47,000, and also cover up to a maximum of $75,000, if doing so is necessary to keep work on schedule with a looming Dec. 1 state-mandated project completion deadline. Hegge noted that PSF has already received an extension of the deadline, to Dec. 1, but stressed that, with the necessary funding in place, the required work will be finished by then. She also stated that PSF had first approached its bank, Alerus Financial, for the necessary financial relief and had been declined.
The vote was 3-1, with Kurt Heldstab, Tom Vedbraaten and Craig Morgan voting in favor, and Steve Erickson voting against. With the 7 a.m. meeting at Valley Technology Park extending past 8:30 a.m., board members Betty Arvidson and Paul Eickhof had to depart prior to the vote; with board member Leon Kremeier absent from the meeting, the board was in danger of losing a quorum, but was OK with four voting members.
The resolution included language adding a 5% interest rate on the line of credit and, since Hegge was willing to offer it, her “personal guaranty” that the $47,000 and up to $75,000 will be repaid. In making her request to the board, Hegge had offered as collateral the full state grant documentation laying out the dollars and timeline, something that CHEDA Executive Director Craig Hoiseth said he felt sufficed as collateral, since there’s no indication the state would default on its remaining financial commitment in the grant.
Hoiseth said he will next get legal advice on whether or not the funds can come from CHEDA’s revolving loan fund. If he is advised that the loan fund is not appropriate for such an allocation of dollars, he said CHEDA’s “Community Investment Fund,” made possible by an additional allocation to CHEDA from the City last year, would be the most likely source of the funds.
Background, and the current state of things
The state approved the Legacy grant in late 2018 totaling $206,000 for a project that would essentially stabilize and secure the historic downtown Crookston structure while Hegge and PSF continue the pursuit of their larger, later-stage project that would convert the former church into a sort of community center with a focus on youth and art. Once this phase of the restoration of the building is complete, Hegge anticipates being able to showcase the improved interior and exterior to the public in order to spur excitement and donations for the final, most ambitious phase.
Subsequent to the grant being awarded, the Crookston City Council agreed to extend water and sewer infrastructure to the site. CHEDA is also directly involved, serving as PSF’s fiscal agent. As the project reaches various state-mandated “milestones,” chunks of Legacy funds are released to PSF, and the funds are then sent to CHEDA to pay contractors and other bills.
The project is basically half-finished; five milestones have been reached and approximately $103,000 has been spent and another $103,000 from the state is still forthcoming as the remaining milestones are met. The key component of the project from this point on involves a new roof.
Asked by some CHEDA Board members how the project got into its current predicament with unpaid bills and no money in the account to cover them, Hegge said it basically comes down to the series of milestones in the state grant not always aligning perfectly with the aspects of the work that the contractor needs to do at particular points in time.
Once the current grant is expended and the related work on the building is complete, Hegge said PSF will continue fundraising for the project that has been the end goal for many years: A community center with a focus on youth and art. She hinted that she’d at some point approach the City for a larger local commitment to that project as part of a larger request from the state through a bonding bill.
“We ask the City for $1 million, get $1 million from the state, boom, we’re done,” Hegge said. “The state is into creative place-making, big time.”
She described the youth and art-focused community center as a “subtle” effort to boost the community’s morale and bridge the gaps and divides and disparities between the rich and the poor, and various ethnicities and cultures.
“We want to focus on the heart-to-heart conversations, and you can do that through art; it’s the great healer,” Hegge explained, adding that the finished product could be a destination for things like class field trips and would be a tourist attraction that would also spur some people coming through town to stop and check it out.
“That brings money into the community,” she said. “It would develop civic pride and be a place for families to go. It would be a winter destination, too.”
There’s a heavy emphasis on youth sports in Crookston, Hegge noted. “Well, what does everyone else do?” she wondered. “Did you ever think about that? This would be the great unifier, with art and music and and art and music therapy.
“We have wonderful artists in this town,” she added. “I think this is a worthy project for your consideration.”