EDA approves funding for Hedstrom Lumber employee housing project

The Cook County/Grand Marais Economic Development Authority -- the EDA -- met on Tuesday, Jan. 12 and as it often is, housing was a major topic on the agenda. 

EDA Executive Director Mary Somnis told the EDA board about an employee housing project at Hedstrom Lumber Company. The lumber company approached the EDA. Somnis told the EDA board that a request had been received from Hedstrom Lumber Company for $100,000 in housing development funds. 

Somnis noted although EDA Board President Howard Hedstrom is no longer employed at Hedstrom Lumber, he has excused himself from the discussion. With Hedstrom not participating in the EDA committee that considers requests from the business and housing development funds, EDA Treasurer Scott Harrison joined the committee.

Harrison and fellow EDA Board Member Carol Mork said they supported the Hedstrom Lumber project for a variety of reasons. Harrison said first because it would be supporting manufacturing, which is a unique business in the county. And second, Harrison said the lumber mill doesn’t just support its workers, but loggers, truckers, Minnesota Department of Natural Resource workers, and so on. 

However, Harrison told the full EDA board that he was not comfortable granting $100,000. The total EDA business and housing development fund for 2021 is $100,000. The EDA has $60,000 remaining from its 2020 fund. Harrison countered with the recommendation to grant $50,000 toward the Hedstrom Lumber Company project. 

Harrison also said there is another way to possibly assist Hedstrom Lumber, as well as numerous other businesses, through the county’s Revolving Loan Fund. Harrison asked for EDA authorization to approach the Cook County Revolving Loan Fund committee to see if the county would consider reducing its loan rates to 2 percent.

If the Revolving Loan Fund committee agreed, that would give Hedstrom Lumber Company a reduction in its loan payments and could make the housing project feasible for them.

Harrison reiterated that this could also help about 30 businesses who participate in the revolving loan fund program. 

Mork supported Harrison's proposal and added that the grant to Hedstrom Lumber Company should be contingent on the completion of the project. A motion was passed to approve a grant not to exceed $50,000, contingent on the reduction of the county's revolving loan fund rates, and to be granted when the homes were in place and occupied. The motion passed with Howard Hedstrom abstaining. 

EDA Director Mary Somnis added that this project could serve as an example of a private/public partnership that could lead to similar projects with other businesses in the county. 

The EDA also heard a presentation that Director Somnis dubbed, "HRA 101." Elizabeth Glidden, deputy executive director and Ella Mitchell, community development director for the Minnesota Housing Partnership (MHP) gave a presentation on their organization. They gave a brief overview of what a housing rehabilitation authority (HRA) can look like and what the Minnesota Housing Partnership can do for communities. 

After the presentation, EDA President Hedstrom asked about the next steps. Glidden and Mitchell will continue to research options for Cook County/Grand Marais, but they told the EDA that the next step would be for the city, county and EDA to decide if they want to move ahead with the formation of the HRA. 

Touching on another standing topic since the beginning of the COVID-19 pandemic, Somnis gave the board an update on business relief grants. Somnis said that the county had received $260,000 to be used for COVID-19 business relief grants and the EDA is administering the grants. Somnis, Small Business Development Center Representative Pat Campanaro, and County Administrator James Joerke are on the application review committee. 

Somnis told the EDA board that the city had advertised for the EDA vacancy due to the passing of Hal Greenwood. In related news, the next day, January 13, the Grand Marais City Council appointed Virginia Palmer to fill that EDA position. 

WTIP's Rhonda Silence spoke with EDA Director Mary Somnis about all of this and more.