Members of the Grand Forks Growth Fund Committee approved extending the lease of a downtown boutique by one month, to allow time to further gather information on executing a longer-term lease.

Kittsona’s lease is set to expire at the end of December. The business, which leases space in the city-owned Corporate Center II, requested the Growth Fund to extend its lease by two years, at a rate of $2,000 per month, along with an extra $500 to go towards back rent. The Growth Fund Committee, at its meeting on Nov. 23, also formed a sub-committee to meet with owner Tessa Hiney and city staff to assess the business’s ability to pay rent, as well as the considerable back rent it owes the city.

That committee, which is made up of Growth Fund members Jon Holth and Kyle Kvamme, will be subject to state open meeting laws. Members could go into an executive session, essentially closing the doors to the public for a period during the meeting, to discuss Hiney’s personal financial information in a private manner. A meeting date for the sub-committee was not set at the meeting, but needs to be publicly noticed before it is held.

Nominally, the business is required to pay $4,931 per month, but in July 2019, the Jobs Development Authority extended its lease for one year and modified the rent payment to $2,000 per month with the remainder deferred. The JDA again extended the lease in July 2020, until the end of the year. The business owes the city back and deferred rent to the tune of $107,006. The debt accrued due to the decline of retail in the city, as well as last summer’s DeMers Avenue construction project. The $500 Hiney proposed to pay towards back rent would take the business more than 17 years to pay off.

“Thanks for your entrepreneurial spirit (and) your endurance during these difficult times,” said committee chair Bret Weber to Hiney.

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All recommendations made at the Growth Fund Meeting will be decided at a JDA meeting on Dec. 7.

Also in Growth Fund news:

-- The committee approved a pair of loans for $14,930 and $9,939 to Integrated Steel Solutions Inc. to help the company buy down the interest rate on commercial loans to refit a building and purchase equipment. The company manufactures steel used in wall panels and other construction projects. The loans accompany Bank of North Dakota Grants for its FlexPACE program.

-- In a similar fashion the committee approved loans to True North Equipment Company for $143,569 and $10,984, to help it buy down interest on a real estate and equipment loan. In August the John Deere dealer bought a 66,000-square-foot facility in the industrial park formerly owned by Wells Concrete. The loans are for establishing the company’s new logistics hub there.

-- The committee also modified the lease the city has with Grand Forks Public Schools for space it rents in the Grand Forks Herald building. The lease was to expire at the end of January with renewal options, but will now end on June 30. GFPS has space on the second floor of the building, and teachers and paraprofessionals there help students who cannot be in regular school buildings develop coping skills that allow them to do so. According to a city staff report: “The school district’s use no longer fits with the building’s planned role as a tech accelerator, and city and school district staff have discussed vacating this space when the current school year ends.”

-- The committee approved a lease for $384 per month at the Herald building for start-up company HubEdge LLC. The company will occupy space with drone technology company Airtonomy. Though the two companies will share space, it is necessary to have separate leases, according to City Attorney Dan Gaustad.

-- The committee approved loans to seven businesses under the recently created C-Run revolving loan program. The program uses federal CARES Act funding to give low interest loans to businesses hit hard by the coronavirus pandemic. Loans ranged from $25,000 to $50,000. When asked by a committee member, Collin Hanson, a community development planner, said the companies are in a position to pay back the loans.

“I would say that all have reasonably shown between collateral debt service coverage (and) personal guarantee, an ability to repay,” Hanson said.