The Luverne Economic Development Authority unanimously approved a $100,000 gap financing loan to Grand Prairie Events in Luverne while the owners work with lenders to stay in business.
If they don’t make it work, the LEDA will operate the facility as a publicly owned community facility.
At Monday’s meeting, the LEDA director Holly Sammons discussed the circumstances surrounding Mike and Wanda Jarchow’s request for help with their business.
“An event center is an important community asset that draws visitors to the community and provides a venue for a variety of large and small gatherings for business and social celebration,” she said.
“In fact, as a valuable community asset, the event center was the only privately owned business that met the criteria to be included on local way-finding signs to direct visitors and residents to the facility.”
She said many cities the size of Luverne have city-owned event centers due to the valuable public purpose they offer the community for activities, events and meetings.
Sammons recommended the board provide a $100,000 gap financing loan for one year.
If Grand Prairie Events has secured improved financing and is able to demonstrate the ongoing operation of the event center is financially feasible, Jarchows/GPE will repay the loan with monthly payments of interest and principal.”
Monthly payments will be $876.04 beginning on Sept. 12, 2021, and continuing through July 12, 2031.
In the event that the Jarchows do not secure improved financing terms or the LEDA has determined that the continued operation of GPE is not financially feasible, the LEDA will purchase the event center from the Jarchows for the outstanding principal balance on the mortgage, which is nearly $804,000.
“The facility could continue to operate as an event center as it does serve a valuable public purpose and benefits the local community,” Sammons said.
She said the pandemic economy has been particularly hard on event centers which have had to cancel most contracts due to social distancing requirements.
For example, last year Grand Prairie Events hosted 100 events. This year there are eight events scheduled from July to the end of the year.
Sammons said the future looks bleak for businesses like the Jarchows’ until a coronavirus vaccine is found.
Mayor Pat Baustian weighed in on Monday’s discussion, supporting the importance of a local event center in a community.
“We all want Mike and Wanda to be successful,” he said. “This gap financing will help them out until things get better.”
Residential demolition at 601 S. Donaldson
In other business at Monday’s meeting, the LEDA approved an application by Toby Vos for a $3,000 Residential Demolition Grant to demolish a structure on his property.
According to Vos, the house and attached garage are substandard and dilapidated. The foundation is sinking (more than six inches) and the home is structurally unsound and uninhabitable.
He owns two adjacent lots, and the house to be demolished is on the lot next to the house where he lives. He plans to leave the garage standing and the rest will reportedly be green space.
Vos has submitted proper paperwork and meets all the requirements for the grant. The LEDA approved his request unanimously.