Businesspeople and three Lindstrom city council members met last week, (Nov. 27) in a special session to drill a little deeper into a request presented at the November 15 city council meeting for public aid, to help fill a financial hole attributed to this summer’s roadwork in town. About a dozen business owners last week told the mayor and Council members Joe Wishy and Curt Flug, that their revenue losses are directly the result of the Highway 8 reconstruction. Spokesperson for the businesses Jeff Lavik, said he met with some business people and estimates about $3.5 million in lost gross revenues due to the roadwork. Lavik said they compared April to November figures for the years 2011 and 2012. Mayor Keith Carlson suggested that a more useful indicator is net income. “Gross is just where you start,” he explained. Carlson also accepted a “confidential” coded worksheet from Lavik, that reportedly details the 2011 versus 2012 sales figures. Lavik said he could also compile net income information but it couldn’t be for public consumption.
Lindstrom’s City Attorney Soren Mattick reminded the audience that in requesting public monies-- any documents substantiating fiscal conditions of applicants become public. Jason Gamble, an area banker and who serves on neighboring Chisago City’s Economic Development Authority, commented that government programs are meant to fill gaps where private sector assistance is unavailable. Aid is very specific and most programs are for helping business with “bricks and mortar” needs. Gamble said local bankers are willing to review earnings, assets and liabilities and work with any local small business owner who may need a cash infusion. He asked, “Is a government subsidy even the answer?” Wade Carlson, owner of the BP gas and service station, also observed that the first thing any government program will want is specifics. Exactly what is the amount of money Lindstrom is looking to infuse into the local economy and who needs how much?
He stated, “We first need a realistic plan if you want to make this work.” Nancy Hoffman, the Chisago County HRA/EDA Executive Director, explained that long ago the state made available compensation for property owners seriously affected by a state road project-- but with years of government budget cuts there’s not much left in the MN Dept. of Transportation budget for this sort of thing. Attorney Mattick also advised the audience that the key in successfully landing government aid programs is fitting the peg into the hole. They must draw a direct link between lost revenues and the Lindstrom highway project. Gamble added that he guesses state lawmakers probably are hearing it was a bad year for revenue on the Iron Range too. Simply submitting a general plea for financial help won’t make a big impression.
Lindstrom Council did support having the city draft an official letter of concern and act as an advocate for the situation to state and federal lawmakers. Council agreed there is no legal mechanism in place for a city to act as a general lender for the businesses. Mattick noted that the new medical clinic; which Lindstrom entered into a subsidy agreement with, only gets public funding because it promises a certain number of new jobs, a certain taxable market value increase for the city and a new employee pay rate. Hoffman offered to sit with business owners and review their qualifications for a couple of “micro-lending” programs she has identified that might provide some zero interest assistance. But, she also cautioned, “This is not your typical loan request.
Programs are set up for seed funding and acquisition of equipment, job creation...but at least (federal regional economic development agencies) we are talking to at this point are willing to work with us.” Council concluded the special session asking for an update at the Lindstrom Council’s regular December 20 meeting on the response to correspondence with lawmakers, and on how many businesspeople were initiating applications through Hoffman’s office.