To the Editor,
Mabel city officials recently learned of concerns regarding the construction financing of a city-owned incubator building. The Economic Development Association (EDA) and city council want to provide clarification.
Interim financing for the approved $450,000 incubator building, which the city will lease to a private daycare provider, has been secured for up to three years, at 4% interest. This loan may be paid off at any time without penalty. In the meantime, the city is diligently working with MiEnergy Cooperative to apply for $300,000 through USDA’s Rural Development Loan and Grant (RDLG) program. This program allows rural cooperatives to borrow money from the USDA that they, in turn, can lend out specifically for economic development projects in rural communities. If approved, the RDLG funding would come interest-free, with payments made over 10 years. In addition, Mabel Cooperative Telephone previously approved a $150,000 loan to the city for construction of the incubator building. In April, the EDA proposed a 30-year loan agreement, at 2% interest, with the telephone company. Under these suggested terms, the first 15 years of the loan would be interest-only payments; the remaining payments would include interest and principle. Additional dialogue continues with both MiEnergy Cooperative and Mabel Cooperative Telephone.
It is our joint hope these details present a clearer picture of the proposed financing for the incubator building project.
Sincerely,
Mabel EDA and City Council
Mabel, MN