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Rushford City council: Joint session looks at flood loans


Fri, Mar 7th, 2008
Posted in Government

RUSHFORD - In a special joint-session of the Rushford City council and EDA on Monday, March 3, members presented tailored specific disaster loan policies to meet special-case needs, but largely decided to stick with program guidelines that have resulted in nearly $14-million in flood recovery allocations since last October.

With City administrator Windy Block, councilmember Laura Deering and EDA-member Brad Woxland absent, the quorum of members from committees responsible for reviewing and approving State aid to 54-local businesses to-date, unanimously approved 6-resolutions to amend, or not to amend, disaster loan policy. Revisions will have to be approved by DEED.

1. Following a unanimous resolution, the EDA is authorized to work with the owners of commercial flood-zone property not engaged in business activity at the time of the flood. Two cases-in-point, the former bakery and the former Riverwood restaurant, sit kitty-corner across from each other at the stoplight downtown. Members discussed the need to encourage development on these sites, and avoid building condemnation. The joint committee agreed to extend C-1 forgivable-loan eligibility to restore to structural and minimum sheetrock interior condition any commercial property in a similar situation.

2. At least one property in the central business district will be demolished, with no immediate plans to rebuild. Members discussed the status of the former apartment building belonging to Henry Becker, then unanimously agreed to provide a C-1A-type, non-forgivable recovery loan to eligible commercial property owners to cover demolition costs, stipulating that the property must be rebuilt-commercial within 5-years.

Considerable discussion focused on the issue of rental housing, which keeps falling through the recovery crack between business loans from DEED and housing assistance though SBA and the MHFA-Quick Start program. But, with the exception of Becker's exceptional case, little remedy to rental property owners could be offered through business loan policy revisions at Monday's summit meeting.

3. Home business owners affected by the flood will have to provide proof of business activity in the form of an IRS Schedule-C tax return before they can qualify for recovery loans. This has been the policy to-date, and members voted unanimously to continue with the Schedule-C requirement.

4. Assistance to cover relocation costs for businesses forced out of their commercial space by the flood will be evaluated and provided to qualified applicants on a case-by-case basis. Members discussed the examples of the Dental Clinic and Winona Health before voting unanimously to approve the resolution.

5. Discussion of a proposal to make further modifications to disaster recovery policy, specifically, not to prioritize eligibility for assistance first to businesses that suffered flood damage, found little traction. Loan consultants Pettipiece and Clawson cautioned members that given the State budget deficit, lawmakers might demand refund of unallocated resources from the recovery account. Though some members argued that the spirit, if not the intent, of the disaster legislation prioritized flood victims ahead of businesses seeking to expand or businesses not touched by flood water, members voted unanimously not to make the priority explicit, citing time constraints.

6. Members unanimously approved a resolution to forgive all-or-a-portion of mortgage and deed registration fees associated with flood recovery loans.

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