Detroit Lakes Development Authority business loans will offer market-rate interest – Detroit Lakes Tribune

Detroit Lakes Development Authority business loans will offer market-rate interest – Detroit Lakes Tribune

DETROIT LAKES — The Detroit Lakes Development Authority has agreed to change the interest rate on business loans it offers from 4 percent to the market rate offered by major lenders.

At the monthly development authority meeting Tuesday, May 7, Community Development Director Larry Remmen said the current market rate is 6.75 percent. He explained that bringing the interest rate back to market value prevents the government entity from competing with banks. However, the 20-year term limit can help keep the loan affordable for small business owners.

The average loan amount taken out from the Development Authority was between $100,000 and $250,000. The Development Authority has three loan pools from which it draws for its loan programs. Remmen said the combined funds totaled $1.5 million.

The Development Authority unanimously agreed to change market value loan interest rates.

Development Authority offers facade grants

The Development Authority’s Facade Improvement Grant Program provides funding for the upkeep, maintenance and renovation of commercial building exteriors in the downtown corridor. Remmen explained that they are currently offering a 10% grant, with a maximum amount of $2,500. Essentially, if someone spent $25,000 or more to improve their facade, they would receive $2,500 in grant money to offset the cost.

“Last time when we talked about it, there were discussions about possibly increasing this amount,” Remmen recalls, adding that the increase could be in the total amount offered or the percentage. He said if the coverage percentage of a project was increased, it would favor small businesses, while increasing the maximum amount would favor large businesses.

“So we have to think about who needs help the most and who are we trying to help the most,” he said.

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Development Authority member Nate Hunter discussed increasing grant opportunities for facade improvements through partnership with other organizations.

Barbie Porter / Detroit Lakes Tribune

In an email, Remmen said the following businesses received funds from the facade improvement grant:

  • Becker Pet and Garden
  • Mark Hagen, 817 Washington Ave.
  • Norby Apartments
  • Washington/Bucks Mill Brewing Partners
  • Consumer store
  • Steve Zima, 908 Washington Ave.
  • The nine
  • Belle Junque
  • Real Pro Cormadd, LLC, 923 Washington Avenue.
  • Nature’s Embrace Soap Company.

Alderman Ron Zeman, who is also on the Development Authority, said he believes the funds should be directed toward small businesses.

Development Authority member Jon Riewer suggested offering a higher amount for full grant repayment and asked, “Why not sweeten the pot?” »

Development Authority member Nate Hunter added that many people and groups take pride in downtown. This desire to improve and maintain the corridor could provide opportunities to raise additional funds for those seeking help from a grant program, he suggested.

Discussions about providing funding to locations outside of downtown have also taken place.

The group discussed the use of funds and appeared to favor using funds for buildings, rather than signage. Their discussion noted that if a business owner received a grant and later closed their doors, the funds received would still benefit the downtown area if spent on things such as new windows, rebuilt bricks, etc. .

When discussing how much the grant could provide, Riewer said, “I don’t know if that matters to me. I know it’s important to drive through downtown Detroit Lakes and see every building looking brand new.

Wanting to maintain the aesthetics of the buildings, Remmen suggested hiring an architect to create several renderings of downtown buildings. He explained that if a store owner wanted to spruce up the building, the drawings could provide options. Incentives to use the renderings could also be provided through grants.

Remmen said the cost of the architectural renderings would be up to $18,000 and would include five or six renovated facades.

Riewer liked the idea but asked if the architect’s cost could be offset by partnering with another group, whether nonprofit or otherwise.

“If you want to start drawing, I would use a local charity,” Riewer said.

The Development Authority agreed to explore details of the grant amount at an upcoming meeting and to discuss the idea of ​​creating professional renderings of downtown building improvement concepts with others city ​​groups.