Local restaurant stirs conversation on county's revolving loan program
Oct 10, 2018 11:19AM
By Joe Friedrichs of WTIP Radio News - October 10,, 2018
What is the county’s role in lending money? Should the county accept private land to cover a business or individual's financial debt?
These were topics addressed during a meeting of the Cook County Board of Commissioners Tuesday, Oct. 9.
At the heart of the conversation was a debt owed to the county's revolving loan fund from the Birch Terrace Supper Club in Grand Marais. During Tuesday’s meeting, Cook County Auditor-Treasurer Braidy Powers shared an update on the county’s revolving loan program. Under discussion was a request from local resident Evelyn Larsen that the county accepts a parcel of land in exchange for debt owed on the Birch Terrace Supper Club, a local restaurant in financial straits. The owners of Birch Terrace, Dave and Brian Larsen, fell behind on payments to the county’s revolving loan fund and have not made a payment in nearly three years.
Evelyn Larsen is the mother of the Larsen brothers. The house of Brian Larsen was collateral for the loan provided by the county.
The assessed value of the land Larsen offered the county to pay off the loan and keep her son’s house in his possession is worth approximately $45,000, according to Powers. The amount still owed on the Birch Terrace loan is more than $56,000.
Commissioner Bobby Deschampe said the loan was not to be repaid with raw land under the original terms of the agreement.
“I don’t think that’s good business for the revolving loan committee,” he added.
Commissioner Heidi Doo-Kirk also expressed concern about the arrangement, wondering if the property would be similar to tax-forfeited land or simply be sold as though the county were selling private property.
The land Larsen is putting up to fulfill the debt is located near County Road 60.
Commissioner Myron Bursheim, who also serves on the revolving loan committee, said the only other option was the foreclosure on an individual’s home. Rather than do that, accepting this land as less than the amount owed on the debt seemed like the best option, Bursheim said.
Commissioner Jan Sivertson said accepting private land at less than it is owed with regard to an outstanding debt seems like a bad option for the county, and homes as collateral are set up for a reason.
After discussing their options, the board voted 4-1 to send the issue back to the revolving loan committee to come up with a better plan, rather than accept the raw land in exchange for a debt settlement from the Birch Terrace Supper Club in Grand Marais. Commissioner Bursheim voted against the motion.
According to Bursheim, a situation such as that presented by Birch Terrace could ultimately cost local taxpayers money.
WTIP’s Joe Friedrichs spoke with Bursheim after Tuesday’s meeting. They spoke about the role of the revolving loan committee and the situation with Birch Terrace.
Follow this link to listen to the interview on the WTIP website. http://www.wtip.org/local-restaurant-stirs-conversation-countys-revolving-loan-program