Loans – East Grand Forks Council approves forgivable loans for hospitality businesses affected by pandemic
The council, at a special meeting on Monday, Dec. 21, approved $260,000 to be moved from the city’s reserve fund to the Economic Development Authority, to create a forgivable loan program for those businesses. Disbursal of those funds won’t happen until the end of January however, to allow the city attorney time to draft the loan documents, and the EDA to establish the parameters of the program and meet with the targeted businesses. Minnesota Gov. Tim Walz on Nov. 18 barred restaurants and bars from serving customers in-person for one month, then extended the order on Dec. 16 as the state continues to grapple with the coronavirus.
East Grand Forks Mayor Steve Gander suggested large employers like the Blue Moose and Up North Pizza not receive more than $25,000. Other businesses, like Joe’s Diner and the Spud Jr., which are not eligible for a recently passed state aid package due to not having taxable income last year, can receive up to $15,000. Remaining establishments could receive $10,000.
Council member Dale Helms said that even with the city aid, some businesses might not survive.
“It’s not even a Band-Aid. It’s a piece of tape,” Helms said.
But Gander responded that though the program is no substitute for actual sales and being fully open, the program “could be everything” for some businesses in need. Gander said the proposed dollar amounts of the loans could cover outstanding tax bills, with, in some cases, enough left over to cover other expenses.
“This is real money to these businesses,” Gander said.
The city has three programs in the works to support businesses, of which only one is up and running. That program is a no-interest loan, with payments deferred until Sept. 1, 2021. Interest doesn’t accrue until that same time a year later.
The second is the forgivable loan program, and the third will be a grant program that will arise from a recently passed state aid bill that doles out nearly $115 million to counties. EDA Director Paul Gorte told the council Polk County would receive a little over $600,000 from the state and East Grand Forks would likely receive about $225,000.
Gander also noted that COVID-19 vaccinations for those in the top tier of priority, including health care workers and residents of long-term care facilities, could begin by Dec. 30, if not a day earlier. Vaccinations for the general public, he said, are still weeks away.
“It’s pretty cool it’s happening,” Gander said. “I believe it’ll change things up pretty well for changing whatever that pandemic curve was going to look like.”