The Rushford City Council has unanimously approved the purchase of the Farmers Win property downtown. Last month, the council voted 4:1 to make a new offer to purchase the site for $225,000 without contingency on environmental issues. The city will proceed with all environmental studies after the sale.
Utilizing the purchase agreement originally drafted by Farmers Win, City Clerk Kathy Zacher has redacted sections of that agreement that are no longer pertinent to the sale. According to Zacher, it not only spells out the details of items such as assessments and flood loans but also provides legal assurances that Famers Win is unaware of any specific concerns with the property. These are the same assurances state statute requires on other real estate purchases.
“It’s all in there and was approved by them,” said City Administrator Tony Chladek.
State statute also dictates that if a city has a comprehensive plan on record, the Planning Commission must review sales to ensure they meet plan objectives. As the city currently lacks a quorum on the commission, the council affirms the deal meets the language in the comprehensive plan.
The council provided no closing date for the sale. It is subject to final review by the city attorney.
The council also considered a request from Jessie Street Java/Feller Properties to forgive the accrued interest of $42,000 on their Economic Development Authority (EDA) revolving loan
fund. The Jessie Street Java property is for sale and was listed nearly a year ago. Owner Amy Feller cited a real estate downturn in the city and a challenging lending atmosphere as hindrances to securing a sale. Feller cannot sell the property on a deed contract or liquidate any coffeehouse property due to the EDA contract, which provided the business with financial assistance 10 years ago.
“The EDA discussed forgiving the interest. It is not automatic forgiveness, but if you had an offer to buy the property,” explained Councilor and EDA member Sally Ryman.
Council discussion included forgiving the entire balance of accrued interest, forgiving a portion, freezing interest accrual while the building was for sale, and doing nothing. The EDA needs financial statements and status updates if forgiveness is applied. If not provided, forgiveness would cease.
“I’m not trying to obstruct anything, but we can’t obligate future councils and EDA. There should be something in place,” said Chladek.
“The original loan was given with interest. You’ve come with a big ask, but we’re trying to be stewards of the money,” stated Mayor Terri Benson. “This will be a precedent. We’re opening the doors to a lot of businesses that could come asking. I want to be very cautious.
“I understand your point. You need to understand clearly what we’re offering you. They’re willing to provide forgiveness for a year or two, maybe more, if there’s a contract in hand. For the indefinite? No. Our role is to be stewards of the money that was given out to you. We’re trying to be respectful of you and our finances.”
“I don’t even know how I’m going to run Jessie Street. I owe more than it’s worth because Rushford rates have dropped. I’m at my wit’s end,” said Feller. “So much has happened in that 10 years, COVID, a street closure, and I don’t want Jessie Street to close. I’m doing whatever it takes to keep another business open downtown.”
“I would be willing to have a period of three years. We’ll forgive the interest if you have a deal, but it depends on how the deal is structured. If in three years, it hasn’t sold, then we’d need to evaluate,” suggested Ryman.
“We want to get our principal when helping her on her way,” added Councilor Jim O’Donnell. “With no more accruing interest, well, that’s a sweet deal.”
“There’s no sweet deal in any of this, but it provides some structure,” said Benson. “I think a year is tight, given what the market is.”
Feller questioned the recently approved EDA business programs that allow up to 50% forgiveness of loans in the second part of 10-year loans aimed at renovating businesses or getting new businesses into available properties. The council clarified that those loans are for smaller, low-risk amounts.
“I mean no disrespect,” said Feller. “I just want to keep this going. It’s easier to keep a business that’s open going than it is to start a new one.”
After further discussion, the council unanimously approved freezing the accrual of interest as of the end of 2022. Feller Properties will have until September 2026 to sell the property. If not sold, the council would determine what happens to the old and new accrued interests. Loan payments made during this time will adhere to the current payment schedule, applied to the loan’s principal. The EDA will draft a letter of agreement that Feller can use to market the property to potential buyers and in bank negotiations.
“If in that time, you haven’t put together a deal, then we have a different conversation,” reminded Ryman.
“Unfortunately, we’ve had people walk away and that’s what we’re trying to avoid,” said Benson.
In other news, the Library Board will hold a meeting for potential contractors for the Susan Hart Memorial Gazebo project. The board contacted many local contractors and may construct the gazebo this year.
The next regularly scheduled council meeting is at city hall on Monday, September 25, at 6:30 p.m. The public is encouraged to attend.