TOWER— Apparent miscommunication over how to handle an IRRRB grant to assist development of the town home project at the city’s harbor threw the funding into question Monday night after the city council took no action on a $125,000 loan request from Orlyn Kringstad and his Tower Vision 2025. Instead, the council, approved a “pay estimate” of approximately $41,000 for the project, which councilors indicated would be drawn from the city’s storefront renovation fund.

By Wednesday, however, the confusion was being ironed out and the funding appeared back on track.

The Tower Economic Development Authority had reviewed the full loan request from Tower Vision during an early morning meeting on Monday. TEDA prepared detailed findings and recommendations to assure that the request met the criteria that the IRRRB had set for the loan. TEDA had recommended approval of the full $125,000, with actual payment to be allocated as the developer presented invoices for expenses incurred and proof of payment.

The IRRRB board approved the grant to TEDA back in February, specifically to assist an identified funding gap in some of the front-end development costs for the town home project, particularly architectural work and project sales and marketing. The funding, according to Kringstad, will allow both the town home project and subsequent phases of the overall development to move forward more quickly. The funds, once repaid, are set to become an ongoing revolving loan fund that could aid future development work by TEDA.

For a time following Monday’s council meeting it appeared that the arrangment might fall through. As of Tuesday Kringstad was considering declining the loan due to continued delays surrounding the funds.

TEDA’s recommendation for loan authorization was supposed to go to the city council Monday night, but that’s not how City Clerk-Treasurer Linda Keith presented it to the council. Instead, she presented what she termed a “pay estimate,” but indicated she didn’t have invoices to support the request. Kringstad had provided invoices totaling $76,000 to TEDA earlier in the day, but the invoices were not necessary for loan authorization, which was supposed to be the issue before the council on Monday night. Tower Vision will submit invoices to the city whenever the developers wish to draw funds on the loan.

Keith went on to suggest that the grant from the IRRRB may not be officially approved, and told councilors that the state agency would not provide any funds up front, but only after the full $125,000 was expended. And since the city’s recently adopted loan guidelines allow for only 50-percent reimbursement on incurred project expenses, Kringstad’s group would need to expend $250,000 to receive the full loan amount. That could take months, which Keith said would likely require the city to zero out its storefront loan account and eventually tap its general fund.

Kringstad pushed back on that suggestion. “I think that should be verified in writing with the IRRRB,” he said. “That was not my understanding of how this would work.”

Part of the confusion stems from the unusual nature of the grants that the IRRRB approved for three local EDAs, including $125,000 each for Tower and Ely’s EDAs, along with $100,000 for the Hibbing EDA.

Chris Ismil, who is overseeing the grant and subsequent loan to Tower Vision, said it was the first time that the agency had made such grants and it took longer than usual to determine how to structure the funding agreement.

Ismil said the city can apply for the funds as they are expended, so the city will not need to tap its reserve accounts, as Keith had indicated.

As of Wednesday, it appeared that Mayor Josh Carlson had gotten sufficient clarification from all the parties and that the funding arrangement would be in place within a day or two.

The council will likely still need to approve Tower Vision’s loan application, which Carlson said he expected to take up at the council’s May 22 meeting.

Joint facility in question

In other developments, Mayor Josh Carlson expressed frustration with the lack of progress on the joint emergency services building, and raised the prospect that it may not move forward after all. Carlson said the joint powers board overseeing the project had requested at their last meeting that the project be downsized some more to get the price tag to $2.7 million. “That did not happen,” said Carlson, who noted that the revised drawings outlined by the architect reflected a $3.2 million cost.

Given the lack of progress over months of meetings, the board discussed some other ideas— such as having Breitung Township continue to house its own fire department, with the joint building limited to the Tower Fire Department and Ambulance. “The other option that I presented was to scrap the whole project,” said Carlson. He said the idea wasn’t popular with others on the board, but he noted: “We’re kind of at a standstill. In the meantime, we have a fire truck sitting out in the weather, and need a third ambulance that’s ready to go.”

In related action, the council approved a request by Carlson to hold a meeting to gather public input on city buildings in hopes of getting more direction on how to proceed with renovations or replacement of city facilities, including the joint emergency services building. The council set the meeting for 7 p.m. on Wednesday, May 24, at the Tower Civic Center.

In other action, the council:

• Approved a request by Carlson to take $10,000 from the city’s reserves to pay for initial design, planning, and possible construction of a new baseball field near the elementary school. “In the six years I’ve been on the council, there has been very little money spent for recreation, something to provide an alternative to sitting at home on the tablet,” said Carlson. The city will likely also apply for possible grant funding from either the Minnesota Twins or Major League Baseball to pay some of the costs of actual construction.

• Approved a request by the Main Street Enhancement Committee and the Tower Women’s Club to pay for repainting of the Tower Civic Center. The city accepted a quote of $3,000 from Doug Workman for the project, which includes the cost of paint. Workman said a very high quality paint that would be ideal for the project was on sale at Sherwin-Williams through May 12, and would save the city $20 per gallon. Workman said he would power wash and clean the civic center exterior before applying the paint. He said he should be able to get the project underway almost immediately. Funding for the project will come from city reserves.

• Approved a fuel discount for the owner/operator of a new seaplane operation at the Tower airport. The discount will be based on volume, with a 20¢ per gallon discount for the use of 2,000 gallons per year, a 30¢ per gallon discount for using 3,000 gallons, and a 40¢ per gallon discount for using 4,000 gallons or more. Councilors agreed that the advantages of running more gas through the system more than compensated for the lost revenue. The return of a seaplane operation to the airport is expected to roughly double the city’s fuel sales.

• Approved a request for proposals for landscape design services for a planned welcome park near the civic center. The recent IRRRB community enhancement grant included $5,000 for the design work.

• Approved a right-of-way easement that will allow T-Mobile to run a fiber optic cable to a transmitter on the hill north of town.

• Approved a $100 fine and a stay of a liquor license suspension for two years for D’erick’s Tower Liquors for selling alcohol to a minor.

• Tabled listing of the city’s former dump property pending completion of an appraisal.

• Approved allowing airport hangar owners to cover their potential liability through existing homeowner’s insurance policies, with a minimum of $300,000 coverage.