$500,000 EGF loan goes unpaid for 10 years, city officials to meet with company who owns Boardwalk building
East Grand Forks city officials are pursuing payments for a $510,000 loan that that they say have slipped through the cracks for roughly a decade.
City staff met with board members of East Grand Forks' Economic Development and Housing Authority Tuesday to discuss the outstanding loan, which was originally made in 1999. The EDHA lent Boardwalk Enterprises $510,000 at zero interest to help construct the building which currently houses the Drunken Noodle and Boardwalk Bar and Grill restaurants, staff said.
Annual $30,000 payments were scheduled to start in October 2003 and finish in 2019, according to a loan agreement provided by city administrator David Murphy. But those payments never came, city attorney Ron Galstad said.
"There hasn't been any payments on it," Galstad said.
Jim Richter, the EDHA executive director who originally signed the loan agreement, declined to comment after the meeting Tuesday.
Galstad told board members that staff called the special meeting Tuesday to discuss their next steps. City staff will file the mortgage documents today, and several EDHA board members will meet with Boardwalk Enterprises officials soon to discuss the loan.
"We've got a loan out there that hasn't been serviced, and we're going to discuss that with the principals of the company to attempt to get the loan repaid," Galstad said. He said he's not sure where the loan funds originated.
Galstad said the management of the company has changed since the loan was originally made in 1999.
A 2011 Herald article said that Dan Stauss is an owner of the Boardwalk building and is the brother of East Grand Forks Mayor Lynn Stauss. Mayor Stauss couldn't be reached for comment Tuesday night. Efforts to reach Dan Stauss were unsuccessful.
Galstad said he wasn't sure of the current makeup of the ownership group, but said he's been in contact with Dan Stauss.
Boardwalk Enterprises isn't listed as an active company on the Minnesota secretary of state's website, but is listed as the Boardwalk building's owner, according to county property records.
When asked by a board member if the missed payments were simply a matter of negligence, Murphy said they will discuss that at another meeting.