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Boardwalk serves East Grand Forks with lawsuit over $510,000 loan

The city of East Grand Forks has been served with a lawsuit over a long-unpaid economic development loan.

City Administrator David Murphy said the lawsuit was served last week on behalf of Boardwalk Enterprises, though as of Tuesday, online court records didn't show one has been filed. The city and Boardwalk Enterprises have been locked in a debate for the past two years over a $510,000 loan to help build the Boardwalk building, which was first approved in 1999 and has since gone unpaid.

The lawsuit came days before the East Grand Forks City Council planned to consider a liquor license application for a restaurant and bar in Boardwalk Enterprises' building at 415 Second St. N.W. The City Council tabled a decision on that license Tuesday night.

City Attorney Ron Galstad declined to provide documents related to the lawsuit Tuesday. He said it had been provided to the League of Minnesota Cities for insurance purposes.

"And then the league, we're anticipating, will assign it to an attorney to represent us," Galstad said.

Mark Anfinson, the attorney for the Minnesota Newspaper Association, said the city is "definitely required to provide a copy of the summons and complaint upon receipt, regardless of whether they've been filed with the court." He cited a section of Minnesota's Government Data Practices Act.

Property records list Dan and Scott Stauss as partners in Boardwalk Enterprises, who are Mayor Lynn Stauss' brother and son, respectively. Boardwalk has cited construction delays and other costs for which it argues the city is responsible, and minutes from a closed August 2014 meeting put that figure at more than $742,000.

Liquor license

Galstad said City Council members had asked him to put together a report on their options for the liquor license, but he was unable to submit it Tuesday.

"Based on the timing of the materials that were provided and the questions that were asked of me, I wasn't able to submit the report," he said. "Since I wasn't able to do that, I asked them to table it until the next meeting so I could have that report ready for them."

The City Council voted last June to renew Boardwalk Bar and Grill LLC's liquor license on the condition that the Boardwalk Enterprises loan dispute be resolved within a year. The money isn't owed by the restaurant, but the city pointed to the commonality of ownership between the two entities as its justification for conditional renewal.

The liquor license that went before the City Council Tuesday night was submitted under a different licensee name, JDM LLC, with the trade name as "the Boardwalk." Jane Moss is listed as the only partner in JDM.

The license period runs from July 1 to June 30, 2017, according to JDM's application.

An attorney who appeared to be representing JDM was not allowed to speak during the council meeting, and he declined comment to the Herald afterward. But Moss told the East Grand Forks Exponent in April the city was "holding the liquor license over our heads to get what they think they deserve," adding business has suffered over the loan dispute.

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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