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Documents show Stauss family link to Boardwalk

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Documents obtained by the Herald Friday show East Grand Forks Mayor Lynn Stauss’ brother was a partner in a business just a few years after it received a $510,000 zero-interest city loan that has gone unpaid for more than a decade.

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A “modification of mortgage and security agreement” dated March 1, 2002 with Rural American Bank of East Grand Forks lists Dan Stauss as a partner of Boardwalk Enterprises, which signed the loan agreement with the city’s Economic Development and Housing Authority three years prior. Annual $30,000 payments were scheduled to begin in October 2003 and finish in 2019, but those payments were never made, city staff members have said.

Staff revealed the unpaid loan during an EDHA meeting Tuesday. They and a couple of EDHA board members will meet with Boardwalk representatives, including Dan Stauss, next week about the loan, according to City Administrator David Murphy. The loan was used to help build the Boardwalk building, which currently houses the Drunken Noodle/Little Bangkok and Boardwalk Bar and Grill restaurants, staff members have said.

The 2002 document also lists David J. Parker as a partner in Boardwalk along with Dan Stauss. Parker is the only Boardwalk representative who signed the original loan agreement in 1999.

Later documents on file at the Polk County recorder’s office don’t list Parker as a partner in the business and instead list Dan Stauss as the company’s managing partner. Efforts to reach Parker were unsuccessful Friday afternoon.

Dan Stauss has not responded to multiple requests for comment this week. The voice mailbox on Mayor Stauss’s cell phone was full Friday afternoon, and a call to his home was unanswered. Jim Richter, the EDHA executive director who signed the original loan agreement, was not in the office Friday afternoon.

Murphy said earlier this week that the loan issue was brought to his attention by Richter, although he said he wasn’t sure how he discovered it.

Mayor Stauss on Wednesday said he didn’t know anything about the loan, although he was mayor when the agreement was signed. He also said he has “nothing to do” with Boardwalk Enterprises.

No ‘red flags’

Murphy, who came to the city last fall, said he hasn’t discovered any signs of improper activity resulting from the mayor’s brother being a part of the company that received the loan. He noted that in smaller towns, it’s hard to avoid family members crossing paths in city business.

“So the fact that it was a loan that went to the mayor’s brother doesn’t really raise any real red flags to me generally just because of the size of the city,” Murphy said Friday. He has said it appeared the city didn’t “take any steps” to collect loan payments over the years.

Once EDHA representatives meet with Boardwalk Enterprises officials, they’ll report back to the full board. The next meeting is scheduled for May 13.

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John Hageman
John Hageman covers local business and Grand Forks' legislative delegation. Get more business news at aroundtown.areavoices.com. 
(701) 780-1244
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