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Boardwalk decision delayed a day; settlement agreement being drafted, East Grand Forks attorney says

The East Grand Forks City Council again pushed back a decision on settling a long-running dispute over an economic development loan, but the city attorney said Tuesday a settlement agreement is in the works.

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The East Grand Forks City Council again pushed back a decision on settling a long-running dispute over an economic development loan, but the city attorney said Tuesday a settlement agreement is in the works.

The City Council was scheduled to consider liquor license applications Tuesday for a business inside the Boardwalk building at 415 Second St. N.W., which is owned by Boardwalk Enterprises. A public notice for the meeting also stated the council would potentially consider an agreement to settle the dispute that originated in April 2014, when city staff members first said a $510,000 loan to Boardwalk Enterprises had gone unpaid for more than a decade.

But the City Council took no action on the issue Tuesday and instead adjourned until 4 p.m. Wednesday.

City Attorney Ron Galstad cited a "short timeframe to draft up all the settlement documents to get approval." The City Council met in a closed-door meeting Monday evening to discuss a possible settlement.

"We just weren't able to do it, to finalize it today," Galstad added. "There is a settlement agreement being drafted right now."

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A settlement would address the Boardwalk Enterprises loan, pending liquor license applications and a related lawsuit served against the city, Galstad said.

Boardwalk Enterprises partner Dan Stauss declined to comment after the meeting Tuesday.

Background

The loan was part of a development agreement to build the Boardwalk building after the 1997 Red River flood. Boardwalk officials have cited construction expenses and other costs, such as real estate taxes, they argue the city is responsible for under the agreement.

The City Council voted in June 2015 to renew the liquor license for the Boardwalk Bar and Grill, which is in the Boardwalk building, for one year on the condition the Boardwalk Enterprises loan be resolved. The city cited similar ownership between the building and business as justification for the conditional renewal.

A lawsuit served by Boardwalk Enterprises and Boardwalk Bar and Grill against the city in May argues the city shouldn't be allowed to deny a liquor license because of the disputed debt. That complaint, previously provided by City Administrator David Murphy, also alleged the city engaged in a civil conspiracy to damage the Boardwalk's business and defamation.

Still, city staff recommended the council deny liquor license applications from Boardwalk Bar and Grill LLC and JDM LLC, which applied for a license to operate in the same space in the Boardwalk building. Staff cited the unresolved loan and similar ownership between the entities for their recommendation.

The City Council ultimately tabled a decision for a week on June 21 to see if a settlement could be reached, bringing the issue to Tuesday's meeting. The current license to the Boardwalk Bar and Grill expires Thursday, according to a city memo.

Related Topics: DAVID MURPHY
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