EDA: From many, one

The Brainerd Economic Development Authority Tuesday learned about a plan to combine various local revolving loan funds into a single, larger fund.

Sheila Haverkamp, executive director of the Brainerd Lakes Area Economic Development Corporation, presented her idea for a "BLAEDC Unified Fund" to the EDA.

There's more than a dozen smaller revolving loan funds throughout Crow Wing County, Haverkamp said. These funds are held by a variety of entities, including cities, EDAs and utility providers, she said, and funded from a variety of state, local or federal sources.

Most of these revolving loan funds have specific rules attached, Haverkamp said. These rules dictate where the funds can be spent, she said, and on what types of projects.

"It becomes really hard and complicated for a company to try to tap into those resources," Haverkamp said.

Instead of multiple smaller funds, Haverkamp has long thought about how to combine these funds into a single large fund, which she said would make it easier for companies to use. Problems with the smaller loan funds include low balances, small maximum loan amounts, complicated and confusing public processes and unknown outcomes, she said.

"Our vision at BLAEDC is to create a coordinated marketing and management process to streamline it for customers," Haverkamp said.

The unified plan is still in the early stages of development, Haverkamp said, but every fund contributing to the unified fund would get a say in how the unified fund is used.

"It definitely takes a leap of faith in that you are no longer going to be in total control of the decision-making," Haverkamp said. "You have others at the table with you."

Some revolving loan funds can't be legally transferred into a unified fund, Haverkamp said, and those funds would remain independent.

Brainerd City Administrator Jim Thoreen asked, in a hypothetical scenario, if through a unified loan fund, funds from Brainerd, Baxter, Crosby and Deerwood would be used for a project in Merrifield.

"Is that kind of the concept?" Thoreen asked.

"Kind of," Haverkamp replied. "It's going to be a little more simple than that in that it's going to be based on the type of fund versus the actual, physical location where the funds came from."

While funds from Brainerd might be sent out of the community in a unified loan fund, Haverkamp said, funds from outside Brainerd would also flow into the city.

"Now we're going to have a $2.5 million fund, versus your pool that just exists today," Haverkamp said.

Haverkamp has thought about creating a unified loan fund for years, she said, but the timing was never right. Private companies she works with have asked her to look into it more, she said, because a streamlined process makes it easier for companies to borrow money.

"Companies are not interested in the complicated processes that exist now, to tap into the multimillion dollars that exists," Haverkamp said.

Haverkamp received a legal opinion on the legality of creating a unified loan fund, she said, and offered to provide those opinions during a more detailed presentation at a later date.

There's a potential for parochialism, Thoreen said, and for municipalities to refuse to let funds be used outside their respective cities. On the flip side, economic development in one area helps an entire region, said EDA member Jerry Sinner.

"We need to put our selfish interests aside and look at the broader picture," Sinner said.

At an earlier point in the EDA meeting, Brainerd City Council member Kelly Bevans praised BLAEDC and the city's housing and redevelopment authority for the redevelopment work the organizations do. But he spoke out against the small scope of use for loan funds designed for redevelopment.

"I'm going to go so far as to say ... it's killing the city of Brainerd," Bevans said. "We could get some money on the street and get some stuff happening."

Haverkamp will return to the EDA at a later date for a more detailed presentation on the unified loan fund. In another part of her report to the EDA, she noted a data center has been looking at the possibility of locating in Brainerd.

In other business, the EDA received a report from Jennifer Bergman, Brainerd HRA director, on different HRA projects.

The Brainerd HRA applied for and received $650,000 for a rental and commercial rehabilitation program in downtown Brainerd through the federal Small Cities Development Program. The HRA began taking funding applications last fall and is now in the process of renovating four buildings: 602 Laurel St., 606 Laurel St., 214-216 Laurel St. and 711-715 Laurel St.

"Those are the four properties that you'll start to see something happening, hopefully within the next month," Bergman said.

In 2016, Crow Wing County conveyed 113 tax-forfeited lots in the Brainerd Oaks, Serene Pines and Dal-Mar Estates developments to the Crow Wing County HRA in hopes of spurring development. A purchase agreement for the lots was reached with developer Paxmar and on March 15, the county HRA conveyed 12 lots to the developer. Eight of those lots are in Brainerd Oaks and the remaining four lots are in Serene Pines.

Permits have been issued to build homes at 700 Holton Ave. and 710 Holton Ave., Haverkamp said, and the developer wants to begin construction next week.

"He is itching to go and waiting for the frost to go," Haverkamp said.
The Brainerd Riverfront Committee has been hard at work evaluating the Mississippi River Partnership Plan, Bergman said, which the University of Minnesota Center for Rural Design helped develop. The Brainerd Lakes Area Community Foundation awarded the committee a $100,000 "Difference Maker" grant, she said, and the committee has been trying to determine its first project goal.

The committee has decided its first project will be the Three Bridges Trail, an elevated trail running from the Washington Street bridge to the Northstar Apartments and continuing to College Drive. The bridge would be elevated above the river down along the riverbank. The city of Brainerd's 150th anniversary is in June of 2021, Haverkamp said, and the committee wants to have a ribbon cutting for the trail for the occasion.

"It's an ambitious goal," Haverkamp said. "It'll be an amazing project when it gets completed."

Thoreen updated the EDA on actions the city is taking against certain rental housing buildings in downtown Brainerd, particularly 217 South Seventh St. The city is working with the property owner on what to do about the issues at the property, he said, which could include revoking the building's rental license. The property owner has been notified of this action and is appealing it.

The city is also taking action against the long-vacant motel property located at 507 South Sixth St., Thoreen said. The building has been boarded up, he said, and isn't licensed for anything.

"We have two properties that we're going after to help downtown Brainerd find improvement," Thoreen said.