Downtown apartment complex details still need to be worked out

Talk about it

Developers of a proposed new downtown apartment complex near Grand Forks’ old Civic Auditorium have run into a speed bump at the City Council.

Members of the council’s Finance Committee expressed eagerness Monday to get the $5.6 million project started, but weren’t ready to recommend a $375,000 loan agreement between St. Paul-based MetroPlains and the city. They asked the city attorney to continue negotiations and report back to committee Chairman Doug Christensen.

One part of the agreement that caused problems for the committee: A clause required by lenders at CitiBank that would allow them to remove partners in the deal without city approval, meaning the project would be done by someone other than those the city signed on with.

Another problem: The city would have to sign on in a subordinate position to the main lender.

MetroPlains is getting the land free from the city. It’s now a parking lot across the street from the old Civic, where another apartment complex is under construction. The $375,000 loan, the source of which is federal funds given to the city, would yield an annual interest of 0.25 percent with repayment deferred for 17 years.

The company’s worked with the city before, the latest project being the Current apartments downtown on North Third Street.

Christensen said he’s not especially concerned about signing on in a subordinate position. Even if MetroPlains went bankrupt on the deal, there’d still be some kind of building there that has some value and whoever owns it would pay property taxes.

“We’re getting nothing from that dirt that’s right there,” he said, noting that the city-owned land doesn’t generate taxes.

Reach Tran at (701) 780-1248; (800) 477-6572, ext. 248; or send e-mail to ttran@gfherald.com.

Tags: civic auditorium, city council, gf and egf, updates, apartments, construction, business, news, metroplains