City contemplates loan to Cruikshank
A former owner of Granite Gear has been planning a new business in Two Harbors for months. His plans recently hit a snag, but the City of Two Harbors is planning to help.
Dan Cruikshank is planning on opening a bike retail and rental shop and coffee shop on County Road 26. He is buying 6.4 acres from the city and had nailed down all the financing for the purchase and development from a variety of sources. However, a recent appraisal changed the amount his bank and the U.S. Small Business Administration could loan him, creating a $200,000 gap in financing.
SBA suggested the city help Cruikshank.
"The mayor and the whole city council have been really understanding," Cruikshank said.
First, the Two Harbors Development Fund was asked for a $200,000 loan, but according to city attorney Steve Overom, THDC was hesitant to fund a project without collateral. Therefore, Overom proposed that THDC loan the money to the city and the city loan it to Cruikshank's development company.
If Cruikshank defaults on payments, the city would guarantee at least some money back to THDC in the form of tax abatements on Cruikshank's property and the new Castle Danger Property as well as the promise of some profits from any additional land sales on County Highway 26.
"The city would never write a general fund check," Overom said.
The rest of the funding is coming from Cruikshank's pocket and other loans from the National Bank of Commerce, Arrowhead Regional Development Commission and Northland Foundation.
“Dan’s history was with Granite Gear, and that was a Two Harbors success,” Overom said.
The sale should be finalized on Sept. 1 and Cruikshank hopes to open the shop early next spring.
Cruikshank is still employed part-time at Granite Gear as a brand ambassador.
A public hearing regarding the loan to Cruikshank will be held Aug. 11 at the Two Harbors City Hall council chambers at 6:30 p.m., the start of the regular meeting.
“I just want to thank (the Cruikshanks) for their efforts … and hang in there,” Councilor Seth McDonald said.
City: Don't dump here
City officials are raising concerns about inappropriate dumping at the yard waste disposal zone on 20th Avenue in Two Harbors.
The zone is intended only for branch clippings, leaves and grass, but the public works department has reported that other trash, including railroad ties, garage doors and a mattress, has been dumped in the area.
"It's gotten to the point where people think it's a dump," Councilor Jerry Norberg said at Monday's agenda meeting.
Councilors discussed fining offenders, limiting the hours and adding better signage at the site.
The issue was referred to the public works committee.
Frontier pole issue isn’t over
Overom said the city is still battling with Frontier Communications regarding pole attachments.
Lake Connections, the county-owned telecommunications provider, has been stringing fiber cables on poles within the city limits while building its new network. Most of the existing poles are owned by either municipalities or other telecommunication companies.
Many disputes have arisen throughout the process, particularly in Two Harbors, where it is somewhat unclear which poles belong to the city and which to Frontier. The last agreement drawn up was signed in the 1920s with a predecessor of Frontier.
Overom said the city and Frontier have been working on updating the agreement, and the last action was in February, when the city submitted a revision to Frontier and the company was to make its own comments and revisions and send it back. The city still hasn’t received that document.
"We've done what we can," Overom said, adding that he would consider if the city can take any other action to resolve the issue.
Other council action
- The council referred a cemetery issue to the public affairs committee. The topic that will be discussed is the policy at Lakeview Cemetery regarding the number of remains that can be placed in one grave. Currently, the city allows either two cremated remains, one coffin and one cremated remains or one coffin in a single grave site. Any changes would likely limit the number of remains allowed in one grave site.
- Cheryl Erickson’s contract with the city was approved for a second year. The former Minnesota Department of Natural Resources employee has been consulting with the city regarding the effort to bring a marina or safe harbor to Two Harbors. Her previous contract paid her about $11,000 per year. This year, the council instead proposed a contract that would pay her $45 an hour, up to $11,300. Councilors Robin Glaser and Roger Simonson voted no on the contract.