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East Grand Forks: Meeting to discuss unpaid loan must be closed

City of East Grand Forks officials argued Monday that it’s necessary to close a meeting to the public to discuss potential litigation on a large unpaid economic development loan.

The joint City Council and Economic Development and Housing Authority meeting will be held at 5 p.m. Tuesday and will be closed to the public. A public notice posted last week states that the “purpose of the closed special meeting is to discuss possible litigation” and is being closed according to the attorney-client privilege exception to the state’s open meeting laws.

City officials have been pursuing loan repayments from Boardwalk Enterprises, which received a $510,000 loan from the EDHA in 1999. Annual $30,000 payments have not come although they were supposed to start in 2003, city staff revealed during a late April meeting.

A press release sent by City Administrator David Murphy Monday said that Brad Sinclair, the Fargo-based attorney the city hired in its loan recovery efforts, “will advise the City Council and EDA Board regarding his legal opinion which has been prepared in anticipation of litigation.”

“His opinion will include discussions regarding the status of the law, litigation strategy to be employed throughout the litigation, and potential avenues to be (pursued) should settlement become an option”

“It is the opinion of our attorneys that they cannot fulfill their obligation to the city, EDA and the general public to collect this loan unless they can discuss the matter confidentially in closed session,” the press release continues. “The city and EDA recognize and do not take lightly the public’s right to be informed.”

The statement adds that it could be a “couple of months” before any specific information can be disclosed to the public.