Cook County - Grand Marais EDA and AEOA agree to consider housing project

A potential Cook County housing project has not even gotten to the engineering stages and it is already causing consternation among the Cook County – Grand Marais Economic Development Authority (EDA) board and some community members. At the May EDA meeting, the EDA board heard a tentative proposal from Leah Hall of the Arrowhead Economic Opportunity Agency for a multi-unit facility on land donated by the EDA, which would provide “fair market housing.” Hall said AEOA would be the developer for the project, putting together the design and the funding package. However, Hall said, the AEOA would not pursue the project if the EDA did not want them to. The development fee would be 10 percent.
At the end of that meeting, the EDA board asked Chair Mark Sandbo to contact Hall to tell her to proceed with planning for a housing project.
At the subsequent June EDA meeting, after its housing administrator, Nancy Grabko of Community Fundraising Solutions, questioned the 10 percent development fee proposed by AEOA, the EDA appeared to reverse its decision to work with AEOA. At that meeting, EDA Chair Sandbo said it was not “a done deal.”
The EDA’s apparent change of direction brought a citizen forward during the meeting’s public comment period. Laurie Spry, president of the Grand Marais Apartments, Inc. (GMAI) on behalf of the GMAI board, spoke in support of the EDA working with AEOA. Spry said her board had been frustrated by what it felt was a lack of response from the EDA when it sought help to renovate its nearly 40-year old senior apartment complex. Spry said because her board felt there was little interest on the part of the EDA to help, it contacted USDA Rural Development, which referred them to AEOA. Spry said AEOA became the primary grant writer for the renovations needed for Grand Marais Apartments. She said Hall and AEOA had written five grants and garnered $370,000 for Grand Marais Apartments. Two more grants are pending, she said and could bring in another $124,000. Also because of AEOA, said Spry, Grad Marais Apartments has been able to increase its low-income rentals from 8 units to 13.
“We feel very strongly that this relationship and the percentage AEOA takes is well worth it because of the attention to detail and the speed in which we have received the funding thus far,” said Spry.
Later in the meeting, AEOA’s Leah Hall spoke, noting that the 10 percent developer’s fee is “reasonable according to MHFA and GMHF [Minnesota Housing Financing Agency and Greater Minnesota Housing Fund]. Hall said AEOA is a non-profit developer and relies on development funds to run its division, including administration, staff costs, travel and the production of affordable housing in its service area. “With these funds we are able to front money for projects,” said Hall.
Hall said she believed AEOA working on the housing project would greatly benefit Cook County.
There was a great deal of discussion—and concern—about whether AEOA would be competing for the same funds that the EDA seeks.
AEOA’s Scott Zahorik said, “There is plenty of need and work to be done out there. I’m hoping we can work to get things done and not feel that we are in competition with one another. I’d like to keep an open relationship with Cook County.”
EDA Housing Administrator Nancy Grabko noted that a definition of collaboration is that “everyone gives up something.” She asked how the EDA and the AEOA could work together.
EDA Board Member Scott Harrison said he thought partnership was possible, “Forget about being co-developers. That would be complicated. I would consider Nancy’s role as ‘boots on the ground.’”
A motion was made by Doo-Kirk, seconded by Harrison, asking the AEOA to move forward with the housing proposal. The motion carried unanimously and Doo-Kirk added emphatically, “Today!”