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Lanesboro Council turns down loan relief request for St. Manes

Fri, Jun 6th, 2008
Posted in Government

Ted St. Mane and his brothers Chuck and Jeff approached the Lanesboro City Council on June 2 to ask for relief in relation to loans administered by the city. The buildings that they owned were completely destroyed in the arson fire in 2002, and they are required to pay the balance due of a Small Cities grant for the property, which is around $1,700.

Ted stated that he and his brothers believe in Lanesboro and in people helping their neighbors. They have been good neighbors; they've paid taxes and invested their money in Lanesboro over the years. According to Ted, he and his brothers paid more than $75,000 cleaning up the debris after the fire and also helped out their neighbors on Main Street.

Ted added that Lanesboro has been good to them over the years as well, and after the fire the mayor at the time told them to forget about the balance on the loans. They were also told this by the administrator and the clerk. City Administrator Bobbie Vickerman said there is no record of such agreement from any council meeting minutes from that time.

Later, the St. Manes were told they had to pay for damage to the sidewalks from the heavy equipment used to put out the fire, as well as water used for cleaning up. They then sought legal help, and received a modest settlement from their insurance company, which, according to Ted, did not cover all of their expenses and damage.

"We appreciate how the people of Lanesboro helped us during the fire, and ask that you help us a little more and forgive us the amount left on the loan," said Ted.

Jeff St. Mane stood up and spoke about receiving a notice from the city about repossessing the property if the loan wasn't paid off. "That really hit hard," said Jeff.

He said the entire process had become adversarial over the years, which he didn't like, as he has known Mayor Steve Rahn and other members of the council for many years, and doesn't want to "burn any bridges." Jeff believed that there are better ways that it could've been handled, and the city should treat them decently. He felt the letter was inexcusable, and the city should have approached the family and spoke to them before coming to that.

Chuck St. Mane said they paid one payment after the fire, and were then told not to make any more payments. They never heard anything after that.

"We were the victims, we had nothing to do with the fire, but we have been made to feel we did something wrong," said Chuck. He added that their biggest disappointment was that they were not able to recap or put anything up where the buildings were, largely because of the money spent for clean-up. They would like to see something good in that spot.

City Attorney Tom Manion said that after the lawsuit was filed, the city would have received a notice of claim. They would have filed it with their insurance company, who would have advised the city not to say anything. He added the law requires a formal foreclosure notice due to the default on the loan. There is also the fact that the problem has spanned several different councils and a different mayor and administrator.

Mayor Steve Rahn said that he would have been upset to receive a letter like that as well. He said he would like nothing more than to see Jeff move back to Lanesboro, but the city has to do what the law states.

Manion had given the council his legal opinion on the matter after doing some research on the idea of forgiving the loan. He said there really is no rule that deals with a situation like this, but the city needs to look at what would happen if they forgave the loan. If there are other disasters down the road, does the city forgive those loans as well?

"What position are we putting ourselves in for the future?" asked Manion.

Chuck felt that there is nothing wrong with going case by case in situations like this, as this is a very tough, unique case.

Council member Kevin Drake asked if the city has to pay the loan if it is forgiven. Manion answered that the revolving loan fund would be decreased by that amount.

Vickerman said there is another business in Lanesboro that couldn't make it and had to shut down, one that had been in town a long time. They are currently required to pay back the entire portion of their loan and the grant part, which totals around $14,000 because of the state law.

Council member Joe O'Connor said that in any grant or loan, the grantor always faces the risk of business failure or loss. In this case, he wondered if the city would be taking the risk.

It was also noted that Jeff St. Mane had already paid his portion of the loan and would have to be reimbursed if the loan was forgiven. After much discussion and deliberation, the council turned down the request.

Other business

• Andy Drake spoke to the council about garbage trucks tearing up the alleys in residential areas. He said that the trucks weigh 40,000 pounds when they are empty, and that tax payers are paying for the roads and they are really taking a toll. Vickerman is going to look into the possibility of smaller trucks and picking up garbage elsewhere, and see if other cities are having similar issues.

• Hal Cropp said the St. Mane Theatre has been serving complimentary wine after opening night performances, and he just found out that they are in violation of state law. He requested, and received, a wine license to give out wine at these events.

The council also approved the following:

• The asphalt bid from Knife River for $35,175, which is under budget for the asphalt project

• Advertising for bidders on the storm sewer project for Pleasant Street.

• Using Ambulance Claims Processing for their ambulance billing company

• A rock bid from Orval Sorum and Sons for $7.45 a ton.

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