8. EDSR 12-10-2007 - Laserfiche WebLink

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Princeton Union Eagle -Thunder Alley default shakes loan lenders Page 3 of 4 But Blake did agree that there are lessons from the Thunder Alley loan defaults Loan-request analyzers can be more specific on what equipment that loan money goes to and they can be "much more aware of the [property put up For] collateral," Blake allowed. Government makes good decisions, but also makes bad decisions, Blake added. Jackson was asked where the money comes from to replenish what was lost in the defaulted EDA loan from the city. It means a loss of funds for the revolving loan fund to help businesses, Jackson answered. He also explained that the money that was used to make the loan came out of money repaid from loans the city made, using UDAG money. The UDAGs, or federal grants of such large amounts as $400,000 like the city received to redevelop part of the downtown into two shopping malls, were a phenomenon of mainly the 1980s that have since expired. Voss, head of the ECRDC, based in Mora, confessed that the non-payment of $118,000 of the $125,000 that the ECRDC lent to Thunder Alley, "took a pretty good bite out of our revolving loan fund." Then Voss added, "Our revolving loan fund is only a little over $400,000 to begin with." But Voss and Blake were at the same time philosophical that despite the default with Thunder Alley, both the city of Princeton and the ECRDC have had many more loan ventures on the successful side. One particularly successful one has been the lending to Glenn Metalcraft in Princeton, Voss said. He went on to say that the ECRDC board has a lot of good representatives from the city of Princeton, naming Mayor Jeremy Riddle, Jack Edmonds, who is a Mille Lacs County commissioner and Linda Evans, who is involved in bringing arts events to the east central region. There is also Barbara Welty from Kathio Township in Mille Lacs who is an asset, Voss said. Blake pointed to the city recently getting a metal works firm called Anoco Metal Services, and a firm that builds food processing and manufacturing equipment called Tucs to come to Princeton, as examples of promising ventures. The city is also helping a firm called Biomatrix move from a 3,000 sq. ft. building in rural Princeton to expand inside the 15,000 sq. ft, former Bell Canoe building in the city's industrial park, Blake added. It will take time for the ECRDC's loan fund to recover from the Thunder Alley default, Voss said, but he said the Thunder Alley case has also taught the ECRDC board something. It is an "opportunity to look at the size of the loans we make and types of uses the loans go to," Voss said. The Thunder Alley venture, Voss added, was more of atourism-oriented business. "We hope," he said, to make better and more "educated decisions. "We learned from it. It would be ridiculous not to try to learn from these experiences. We're marching ahead." ECRDC staff members still have not determined what all went wrong with the Thunder Alley business, Voss added. Bill and Sue Dunkley are the owners now of the former Thunder Alley building. Calls from the Union-Eagle to the Dunkley telephone number have gone unanswered. But Mike Youso, administrator of Fairview Northland Regional Medical Center that sits across from the former Thunder Alley, confirmed that the Dunkleys have contacted him to talk about ideas for the property. http://unioneagle.com/index.php?option=com_content&task=view&id=415 &Itemid=l 10/26/2007