Grand Forks firms seek loan changes from city
Grand Forks city officials are discussing outstanding loans to two local manufacturers, one of which is at risk of becoming delinquent.
The loans were issued through the Bank of North Dakota as part of an economic development assistance program to Telpro and to Pribula Estates, which was owned by American Defense Industries.
The city’s Growth Fund helped the companies buy down their loans, thereby reducing the interest rate and freeing up funds for expansion.
Telpro was scheduled to begin repaying its loan, which has an outstanding balance of nearly $60,000, at the beginning of this year, said Meredith Richards, the city’s deputy director of planning and community development.
But the company was not making payments.
Richards said a misunderstanding arose from a conversation that Telpro officials said took place between the company and her predecessor.
“It was (Telpro’s) understanding that (the loan) had been restructured,” she said.
Telpro officials will go before the committee on Aug. 19 to make a formal request for loan restructuring, she said.
“It’s not uncommon for us to restructure loans,” said City Council President Dana Sande, a member of the Growth Fund Committee.
Telpro makes construction equipment at its plant just south of Grand Forks.
Pribula Estates is not scheduled to start paying off its loan, with a balance of slightly more than $100,000 until 2021.
But Richards said American Defense Industries recently sold its plant in west Grand Forks to Steffes Corp., a manufacturer of steel parts and equipment. She said the city is still dealing with the “cleanup of that sale.”
“(Pribula) may want to clean up the loan, meaning pay the loan off now rather than wait seven years to do it,” Sande said.
This isn’t the first time the city has worked on repayment plans with local businesses.
In 2011, the city held talks with aircraft manufacturer Cirrus Design, which had become delinquent on its lease and loan payments to the city following the recession.
The following year, Cirrus and the city set up a repayment schedule and has since paid back everything, said Sande.