Grand Forks Committee of the Whole gives early nod to Fufeng financial failsafe
“They more than met our requirements with a very large financial institution that has the qualifications that we’re looking for,” City Council President Dana Sande said.
GRAND FORKS — City Council leaders on Monday voted 5-1 to give an early approval to a financial failsafe in bringing Fufeng Group to the city.
That failsafe is a “letter of credit” — a document that will let the city collect up to $5 million from the Chinese agribusiness if its proposed corn mill project fails. Already, city leaders point out, Grand Forks is estimating $1.6 million on consultants studying the project. That’s precisely the kind of early cost that can be recouped if the deal fails.
The move came at the city’s Committee of the Whole meeting, which is attended by all City Council members but delves more deeply into individual items than large, formal council meetings. The Committee of the Whole cannot make final decisions; instead, the committee simply reviews city business, leaving actual decision-making for later council meetings.
Monday’s meeting was remarkably quiet, with no angry denunciations of Fufeng Group or the city — a hallmark of the process in recent weeks as the city annexed Fufeng’s future site and its neighbors.
The city will eventually spend tens of millions of dollars more on infrastructure projects connected to the project, especially once state grants and federal funding are tacked on. What’s the city’s protection for those expenditures?
“We’re not going to move forward with those (bigger) projects without Fufeng moving forward with their investment,” City Administrator Todd Feland said. “The letter of credit was intended for some of these preliminary costs prior to Fufeng going forward with the construction of their facility.”
The letter of credit is with MUFG Bank, which is Japan’s largest. Feland points out that the bank is subject to U.S. banking law, which was a crucial part of the deal.
“They more than met our requirements with a very large financial institution that has the qualifications that we’re looking for,” City Council President Dana Sande said at the meeting. “So it’s great.”
The only dissenting vote Monday came from Katie Dachtler. Jeannie Mock was absent.
Dachtler could not be reached for comment after the meeting. She represents Ward 2, which after redistricting was expanded to include large portions of the city’s northernmost border, where many property owners are opposed to the project.
The full City Council approval is expected as soon as next week.