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EGF's EDHA director who OK’d unpaid $510,000 loan retires amid a "big black cloud"

East Grand Forks residents listen to discussion regarding the retirement of Economic Development director Jim Richter at Tuesday's city council meeting . photo by Eric Hylden/Grand Forks Herald

Jim Richter, the executive director of the East Grand Forks’ Economic Development and Housing Authority, notified city officials Tuesday that he is retiring effective immediately.

Richter, who was placed on paid administrative leave two weeks ago, originally signed a $510,000 loan that has gone unpaid for more than 10 years. The existence of that loan was made public in late April during an EDHA board meeting.

East Grand Forks City Council members acknowledged Richter’s retirement during Tuesday night’s regular meeting. Many vowed to work to make sure a similar situation doesn’t happen again, and noted that city officials are seeking loan payments.

“People that I’m talking to are tired of things being shoved under the rug, and again this looks like we’re shoving something under the rug,” said council member Clarence Vetter. “I want to assure the citizens, from my point of view, I’m not putting it under the rug.”

Council member Dale Helms added, “We need to do further investigation and we need to find out what happened here and get it resolved.”

Boardwalk loan

The EDHA agreed to loan Boardwalk Enterprises $510,000 in 1999, with annual $30,000 payments beginning in 2003. But those payments haven’t come, staff members have said. The loan was used to help construct the Boardwalk building, which currently houses the Drunken Noodle/Little Bangkok and Boardwalk Bar and Grill restaurants.

City officials have held a meeting with Boardwalk representatives about the loan, and said at the time that they needed to gather more information for a future meeting.

Property records show that Dan Stauss, the brother of East Grand Forks Mayor Lynn Stauss, has been a partner in Boardwalk since at least 2002. Dan Stauss has not responded to multiple requests for comment.

Mayor Stauss reiterated after the meeting Tuesday that he didn’t know about the outstanding loan, and said loans are approved through the EDHA board, not the City Council. Stauss first took office in 1996.

“I don’t think anything crooked was done in here,” council member Greg Leigh said. “I think for the most part, Jim did a pretty good job with the EDHA. Unfortunately, this is a big black cloud that won’t go away.”

Retirement

The City Council and the EDHA board held a closed-door meeting last week to discuss Richter’s performance. The group came up with a recommendation that was to be acted on Tuesday, but City Administrator David Murphy said he could not disclose what that recommendation was because it was a personnel issue.

A meeting agenda posted on the city’s website earlier Tuesday indicated that the City Council would vote on accepting Richter’s resignation.

Leigh said in the years after the 1997 Red River flood, economic development in East Grand Forks was a large job.

“I think it got to be too much for one person,” Leigh said. “We’re trying to move forward and quit using the excuse, ‘Well, that happened because of the flood.’”

Stauss said after the meeting that Richter would always be the first to volunteer for tasks, like setting up the Christmas tree or organizing picnics.

“I really enjoyed Jim,” Stauss said. “The job might have gotten too big. We were giving an awful lot of money, doing a lot of things in those days.”

Richter didn’t return a message left at his home Tuesday. Murphy declined to say why Richter retired.

Murphy previously said he believed Richter has worked at the city since 1987, and his annual salary is $80,200. Murphy said he will receive pay for accrued sick and vacation time, but not a severance package.

Moving forward

Murphy said he, and city staffers Karen Lukasz and Nancy Ellis will lead the EDHA for the time being. Murphy said next week’s EDHA board meeting will start a discussion about the structure of the EDHA.

Murphy also said an audit of the EDHA financials will be made public within the next two weeks. He said finding out how the $510,000 loan went unpaid is important, but his priority is making sure it doesn’t happen again.

“It’s good to know so we don’t repeat it,” Murphy said.

John Hageman

John Hageman covers local business and North Dakota politics. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Bemidji Pioneer.  

(701) 780-1244
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