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MINUTES
Growth Fund Committee Meeting
Office of Urban Development Conference Room
1405 First Avenue North
Grand Forks, ND 58203

October 19, 2010


1. Roll Call:

Present: Doug Christensen, Eliot Glasshiem, and Dwight Thompson. Also present: Greg Hoover, Meredith Richards, John Warcup, Rick Duquette, Klaus Theissen, Keith Lund, Hal Gershman, Bill King (Cirrus), Owen Gohlke (Cirrus), Russ Eickson (Bremer Bank), Tammy Pederson (Bremer Bank), Angie Baumann (Bremer Bank) and Melanie Richardson. Absent: Terry Smith and Dana Sande.

2. Approval of Minutes:

Minutes from September 21, 2010: Motion by Dwight Thompson, second by Eliot Glasshiem to approve minutes from the previous meeting. All present voted aye. MOTION CARRIED.

3. Loan Write-offs:

Master Potato: Greg states that the file on this particular loan is incomplete and found that questions posed by John Warcup, City Attorney, were never addressed. John Warcup states that there are actually two outstanding loans; one of which was secured by a mortgage, the other was an unsecured loan. The loan that was secured by a mortgage, it appears, was part of a tax foreclosure however the file does not contain any documentation regarding notification to the Growth Fund prior to the foreclosure. If the foreclosure was done properly, the mortgage is no longer valid; if done improperly we may be able to pursue recovery of these funds. The file on the unsecured loan contained a promissory note so whether or not we are able to pursue this loan is dependent on the maturity date of that promissory note. Mr. Warcup will continue to research all avenues and report his findings at the next Growth Fund Committee meeting.

4. Cirrus Update:

Presentation: Owen Gohlke presents a brief update of the state of Cirrus financials as well as the overall status of the company today. Mr. Gohlke acknowledged that they understand their agreement with the Growth Fund and are fully aware of the amount of rent due each month but stated that they are struggling to make these payments because they have experienced a significant drop in sales over the past two years due to the current economic situation.

Cirrus has contacted approximately 200 equity firms for additional funding. Dwight questions whether or not some of the equity infusion would be used to bring vendors current. Mr. Gohlke stated that was not their first priority; any funds from the equity firms would be used to fund the business and the future operating needs of the business.

Doug questions when they anticipate getting back on track with their rent payments. Bill King stated that there are three different options which would be to either take the building back from Cirrus for non-payment of their rent or continue on the way things are at this time. The third option would be to restructure into a logical program that recognizes the fact that they have fallen behind. Doug would like to know what they would be able to pay each month and Mr. King indicates that he won’t be able to determine that until after the first quarter of 2011. Russ Erickson from Bremer Bank indicates that the best option would be re-amortization of the loan with Bremer which would help by lowering the current monthly payments. Bill King requested time to get all their numbers together at which time they will mail them to the Growth Fund Committee for further review. A follow-up meeting will be scheduled within two weeks to discuss the options once all of the pertinent information is received from Cirrus.

5. Other Business:

Aatrix Loan: Aatrix paid off three of their outstanding loans in the amount of approximately $165,000., which will go back into both CDBG funds and the Growth Fund. Aatrix has a PACE loan in the amount of $38,000, which they will begin paying on in another 3 years.

6. Adjournment: Meeting adjourned at approximately 5:32pm.




______________________________ ______________________________
Melanie R. Richardson Doug Christensen
Office of Urban Development Chairman