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EGF officials to meet in closed session to receive guidance on loan recovery

East Grand Forks city officials will receive some legal guidance on efforts to recover a large economic development loan later this week.

City Administrator David Murphy said during the City Council meeting Tuesday that Brad Sinclair, the Fargo-based attorney representing the city in its loan recovery efforts, will provide him a draft of his review of the case and a recommendation Friday. Sinclair will then meet with the City Council and Economic Development and Housing Authority board next Tuesday in a closed session.

Murphy said after the meeting that he expects a recommendation for action to be reached during that meeting, but said it would not be public. He cited state statute that allows for councils to close meetings to the public to discuss potential litigation.

The EDHA board was notified in late April that a $510,000 loan from the EDHA to Boardwalk Enterprises had gone unpaid for more than 10 years. The loan was used to help construct the Boardwalk building, where the Boardwalk Bar and Grill and Drunken Noodle/Little Bangkok restaurants now are.

Jim Richter, the former EDHA executive director who originally signed the loan agreement in 1999, retired last month after being put on paid administrative leave.

Dan Stauss, a brother of East Grand Forks Mayor Lynn Stauss, has been listed in property records as a partner in Boardwalk Enterprises. The mayor has said he didn’t know about the loan and is not involved with Boardwalk.

City officials met with representatives of Boardwalk in early May, but Murphy said Tuesday they haven’t had any follow-up meetings. 

John Hageman

John Hageman covers North Dakota politics from the Forum News Service bureau in Bismarck. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Grand Forks Herald and Bemidji Pioneer.  

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