Rushford Sets Hearing for Funding Request

At the December 26 meeting, the Rushford Council heard details of an Economic Development Authority (EDA) request from Brilliance Web Design, DBA Brilliance Business Solutions for the purchase of the Johnson & James Properties, Norsland Lefse & Norsland Bakery & Cafe.
According to the provided documentation, the EDA reviewed the request at their December 20 meeting. The subsidy request from the Milwaukee-based Brilliance Business Solutions is for $250,000. The company based the request amount on the assumed property value. If approved at the original request, the funds would be provided at 2.5% interest for 20 years with no payments for the first year. Additionally, the loan would include $5,000 of forgiveness per year, in years 6-10, for a total of $25,000.
“With our extensive background in leveraging digital commerce for manufacturer’s growth, we are excited to expand Norsland Lefse using our expertise in digital commerce, marketing, and overall business growth,” said a letter from Lori McDonald, company president and CEO.
The longtime business, which has been for sale due to the current owner’s desire to retire, does most of its sales online. Brilliance hopes the funding will help allocate cash towards marketing investments to support expansion. The intention is to improve Norsland’s website, optimize search engine rankings, improve email marketing, utilize analytics for customer insights and collaborate with a consultant to maximize listing effectiveness on the e-commerce giant Amazon.
Brilliance anticipates the effect will create additional job opportunities and provide a significant payroll expansion for Norsland Lefse, with projections showing a whopping 68 percent increase over two years. They intend to continue cafe operations as “a vital community gathering place.”
The total project price will be approximately $640,000, with Wisconsin Bank & Trust providing the primary funding of $340,000, plus a down payment of $50,000 cash from Brilliance. Rushford will be in the second loan position in the form of a lien against the property.
The EDA asked Brilliance for additional information, which the company provided. The EDA additionally requested information regarding their previous work helping customers acquire and grow other companies.
“This is the first time they’ve been acquiring a business. They’re mostly helping other businesses do better,” noted City Clerk Kathy Zacher.
The council did discuss protecting its investment in the project. Should the plan go belly up, the first-position loan holder cannot sell the property to satisfy their loan portion. Furthermore, the bank will notify the city regarding any changes to the loan, including refinancing. The city will be able to oppose specific changes.
“There’s nothing that negatively impacts the city’s position,” noted Councilor and EDA-member Leigh Volkman, noting it seems safe long-term. “They’re also optimistic and appear to be energetic, and sometimes that’s the difference.”
“It’s not a venture capitalist loan,” stressed Councilor Jim O’Donnell. “This is an established business, brick-and-mortar with people working there that hopefully will grow and move forward.”
“I think it’s exciting,” said Councilor Sally Ryman. “The company acquiring it for the e-commerce part is very experienced.”
“It’s very optimistic. It’s really great,” added Mayor Terri Benson.
“It’s good to keep a business in town,” said Councilor Andrew Linder.
The council unanimously approved setting the public hearing for January 22 with a joint council and EDA meeting. The hearing is open to the public.
In other news, the council moved the review of the annual performance evaluation of Administrator Chladek to the January meeting. During reports, Chladek did have one item to note concerning the review process.
“It comes up pretty regularly, and maybe we can integrate it in this portion of the meeting; if you or anybody in the public have meetings where there are groups of people that get together or you want to refer me to a group, I would love to get out and meet with folks,” said Chladek. “Have me get out of the office and meet with groups. I enjoy doing that. I don’t have a problem doing that. I just need references or connections.
The council also learned the city will receive $81,394 in one-time Public Safety Aid funding from the state. The city will split the amount between the Fire Department, Police Department and the Ambulance Service. Despite whether or not Minnesota cities have municipal public safety departments, they will receive funding based on their population. Ryman suggested that cities receiving public safety protection from Rushford may want to contribute some of their funds to Rushford’s departments and services. Zacher indicated service contracts increased this year, and their funding will likely go to that, but acknowledged the suggestion.
“Good job on another year under our belts,” said Benson, ending the meeting. “We look forward to next year!”
The next regularly scheduled council meeting is Monday, January 8, at 6:30 p.m. at city hall. The public is encouraged to attend.