Julie Eddington confirmed at the June 26 Columbus City Council meeting that the Minnesota Department of Employment and Economic Development would not demand payment from the city if JP Ecommerce defaulted on its Minnesota Fund Grant loan. Eddington, from the law firm Kennedy & Graven, said if JP Ecommerce did not pay back the MIF loan, DEED would work closely with the city to take reasonable collection actions. However, she explicitly stated that DEED would “not require the city to pay any of the loan back.” According to Eddington, a city has never been asked to repay a MIF loan or interest. The only thing cities have had to pay for were lawyer’s fees for their own representation in specific cases.
At the previous city council meeting, the council was hesitant to enter this loan agreement for almost $1 million. Mayor Jesse Preiner told Eddington that the council simply did not want to approve the arranged MIF loan until they were certain the city wouldn’t be liable if the company defaulted.
JP Ecommerce is in the process of constructing a 100,000 square foot building for Bare Home, an online bedding retailer, in Columbus. Positive that the city would not be liable, the council unanimously agreed to approve the loan agreement and the execution of its related documents, allowing JP Ecommerce to access the loan of $964,000.
The City Council also made a motion to have Columbus City Attorney Bill Griffith draft a tourism ordinance for an upcoming public hearing. The council is planning to impose a hotel tax. The hotel tax would be paid by people staying in the hotel currently being built in Columbus near Running Aces, as well as any other hotels that may be built in the city in the future. The exact percentage of the hotel tax, which could be as high as three percent, will be determined by the hotel tax rates in neighboring communities. Minnesota local lodging taxes are required go toward tourism promotion.
In addition, the council decided to change the Hagert park land zoning to rural residential so the city can put it up for sale. The Hagerts donated the land to the city for park purposes 30 years ago.