OUR OPINION: City should treat companies as clients
Something happened last week that ought to concern everyone who lives, works and pays taxes in Grand Forks. Cirrus Aircraft, an established local employer, came to the city's Growth Fund Committee to ask for a loan. Company officials were treated...
Something happened last week that ought to concern everyone who lives, works and pays taxes in Grand Forks.
Cirrus Aircraft, an established local employer, came to the city's Growth Fund Committee to ask for a loan.
Company officials were treated rudely. People who were at the meeting said the atmosphere was like a cross examination in a courtroom. The company's vice president said he "stunned" by the treatment.
All of this was reported on Page B1 of Wednesday's Herald ("Money questions delay Cirrus loan in GF").
Readers learned there that Cirrus has had losses. That hasn't been a secret. Cirrus makes luxury aircraft, a tough business in a sluggish economy.
The article also pointed out that Cirrus has met all of its obligations to the city. It outlined the company's plans to repay the loan, which would be used to buy equipment and expand its production facility here.
Cirrus isn't asking for an especially large loan, just under $1 million. It would repay the loan by increasing the rent it pays the city by $20,000 per month, an increase of almost 30 percent.
These are attractive terms for the lender (that is, the city) -- far more attractive than lots of economic development loans, which call for balloon payments after longer periods of time.
Essentially, the terms guarantee that the company always will be current. If it is not, the city will know immediately.
Despite this, and despite the company's record over 15 years in the city, its officials were treated rudely -- not as clients or as customers but as potential deadbeats and credit risks.
The upshot was immediate. The economic development blogosphere chatted about the treatment. Grand Forks got a big black eye. Cirrus began to get feelers from other communities.
Clearly, there's some damage control to be done.
This is not a call for the Growth Fund Committee to stop asking tough questions. It's true that these investments carry risk. It's true that committee members must watchdog the taxpayers' interest.
But it's also true that this can be done in a businesslike rather than a prosecutorial way. Bank executives strike this balance: They must both evaluate a loan's potential and treat the applicant as a valued customer -- that is, with courtesy and respect.
Cirrus deserves an apology, and there's an opportunity for that today, when the company meets the Growth Fund Committee again, armed with more information about its finances.
And city leaders need to be assured that this kind of incident won't happen again. If it does, they'll need to take action, potentially including changes in the structure of the growth fund or the leadership of the committee.
-- Mike Jacobs and Tom Dennis
Herald publisher Jacobs is a member of the Grand Forks Region Economic Development Corp. board.