Herald Journal - Enterprise Dispatch - Delano Herald Journal
Grocery to start up again in Howard Lake
March 8, 2010

By Lynda Jensen

HOWARD LAKE, MN – New owners for the grocery store in Howard Lake have signed documents for Voyager Funds offered by the City of Howard Lake, signaling the start-up of a new grocer in town, according to Howard Lake City Administrator Kelly Hinnenkamp.

The prospective owners are Ohlerdan Incorporated, which owns two other grocery stores in Minnesota, north of the metro area, Hinnenkamp said.

“We have more than enough confidence in their ability,” Hinnenkamp said of the new business owners.

However, it isn’t yet known what time frame, or how long it will take, the new owners to refurbish the building, she added.

The grocery will be in the former Gerry’s SuperValu building, which the city plans to buy on a contract-for-deed basis from Mark Custer.

The city will lease the building back to the business owners, Hinnenkamp said. The amount of money being loaned by the Voyager Fund is $275,000, she added. Voyager Fund money comes from federal dollars, not local taxes.

Public hearing set Thursday

Nevertheless, there is more paperwork to be done, with a public hearing being scheduled by the city 7 p.m. Thursday, March 18 to hear from the public about awarding the funds, which will be paid back on a low-interest arrangement.

The purpose of the business subsidy is to assist Ohlerdan Incorporated in the “acquisition by lease, and the equipping of a grocery store within the city.”

The city plans to loan Voyager Fund money to the retailer, and to the city’s economic development authority, which will cover the down payment on the contract-for-deed to purchase the building, and to pay for refurbishing of the building.

The city cannot do a contract-for-deed for more than five years. At the end of the five years, when the balloon payment is due, the city hopes the new retailer will purchase the building.

For the worst case scenario, if the store were to fail within the first five years, the city has the option to default on the loan and sell the building, or the council could decide then to levy city tax dollars to keep the building.

“The general fund is not obligated in any way for this project,” City Administrator Kelly Hinnenkamp has said in the past. “We have other outs.”

Hinnenkamp explained that if something did go wrong, the city would first deplete the remaining amount in the Voyager Fund, and then decide whether to default on the contract-for-deed or to use taxpayer money.

There is about $425,000 in the fund, and the city said it will likely use 90 percent of the fund for the project.

The city’s Voyager Fund is a revolving loan program that was created in 2000 from federal grant dollars, and has never been fed city tax or levy dollars.

“All of the Voyager Fund will be replenished in the future,” Hinnenkamp said. “Some by the purchase, some from the EDA, and some by monthly payments.”

At the public hearing the council will meet to decide “whether the granting of the business subsidy is desirable and all interested parties may express their comments for consideration by the city council,” according to the legal notice that is listed under the Public Notices section of the paper.

Any person with comments may contact Hinnenkamp at the city, (320) 543-3670.


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