Grand Forks Growth Fund agrees to debt settlement plan with Kittsona

Downtown retailer Kittsona has reached an agreement to settle a portion of its debt with the Jobs Development Authority, then leave its location at the end of February.

Grand Forks City Hall
Grand Forks City Hall, 255 N. 4th St. Sam Easter / Grand Forks Herald

The Grand Forks Growth Fund voted to authorize a promissory note to recover a portion of back rent with a downtown retailer that has fallen significantly behind on what it owes to the city.

Under the agreement, women’s clothing boutique Kittsona will pay nearly $24,000 to the city in $1,000 monthly installments for a two-year period beginning March 1. The shop's rent is nearly $4,900 per month, but the Growth Fund previously modified that rent after the shop suffered a decline in business. The store has been paying $2,000 per month, with the remainder deferred, plus an extra $500 tacked on to go toward its nearly $110,000 in back rent.

The offer to settle the debt at 20 cents on the dollar comes from the shop’s owner Tessa Hiney, and was made by an attorney on her behalf to City Attorney Dan Gaustad. The offer came after a subcommittee of the Growth Fund recommended the shop pay nearly double the amended rent of $2,000, after reviewing Hiney's financial situation.

“I thought 20% seemed a reasonable amount that they would be able to pay back,” Gaustad told the committee.

In authorizing the promissory note, committee members extended Kittsona’s lease until the end of February, giving the shop time to liquidate its inventory. After that time, it will vacate its location at the city-owned Corporate Center II. In the event of a default on the agreement, the business would become responsible for the remainder of the back rent.


In other Growth Fund news:

-Committee members made changes to the Start Up Grand Forks loan program, then retroactively applied those changes to two companies that were recently granted loans. Previously under the program, the Jobs Development Authority, the overseeing body of the Growth Fund, supplied 50% of the funds, and the Bank of North Dakota, through its development fund, would kick in 25%, with the loan holder providing 25%. The JDA will now be providing 75% of those loans after the Bank of North Dakota opted out of the program. The loan program provides working capital of up to $30,000 for companies that can’t secure conventional funding through a bank.

According to Meredith Richards, director of community development, BND stopped participating because of concerns of the JDA being custodians of the institution’s money, as well as how that would impact the city’s accounting and financial reporting practices. Loans to food truck business Tacho Man and Thunder Ray’s Auto Repair were modified to reflect the city’s increased contribution.

-The committee then granted Start Up Grand Forks loans to two companies. Software 701 LLC received a $30,000 loan to develop and market a computer program that aims to improve the success for businesses using Google and YouTube advertising. The business has 93 customers around the world and is expecting continued growth. The loan comes with a five-year term at 5% interest, with principal and interest deferred for the first year.

-The committee also granted a loan in the same amount and same terms to Amy’s Place LLC, a business that aims to start a lunch restaurant at Grand Forks Air Force Base. The business will begin with lunch, then expand to breakfast and dinner options.

Adam Kurtz is the community editor for the Grand Forks Herald. He covers higher education and other topics in Grand Forks County and the city.

Kurtz joined the Herald in July 2019. He covered business and county government topics before covering higher education and some military topics.

Tips and story ideas are welcome. Get in touch with him at, or DM at @ByAdamKurtz.

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