The loan request, totaling approximately $800,000, sparked considerable debate among the EDA members. The proposed terms included a 10-year repayment plan with an interest rate ranging between 1% and 2%, with no payments required until May 2028. This deferment aligns with the projected time when the facility is expected to begin generating a profit. A board member recused themselves due to their involvement with Oak Hills, handing over leadership to the vice president for this agenda item.

During the discussion, several board members expressed concerns about the magnitude of the loan and the potential collateral, noting that the furniture and fixtures proposed as collateral would depreciate over time. Suggestions included securing a mortgage on the property as a more stable form of collateral. Members delved into the financial details, with one calculating that monthly payments at a 2% interest rate would amount to just under $700. However, confusion remained regarding the overall payment structure of such a substantial loan over ten years.

Inquiries were made about potential unforeseen expenses, given that responsibility for the FF&E had not been anticipated initially. A representative for Oak Hills confirmed that the board’s hesitance to sign the lease without securing the loan was a factor in moving the project forward. Concerns about legislative changes affecting funding and the financial sustainability of the facility also arose, emphasizing the necessity for a cautious approach.

Despite these concerns, a motion to authorize staff to prepare the necessary loan documents was put forth and received unanimous approval.

Following this significant agenda item, the EDA meeting shifted to a presentation on the strategic plan by Jason and Sarah from Better City, who participated virtually. They presented the final draft of the plan, which aims to guide the EDA’s efforts into 2026. Jason highlighted the importance of understanding the strategic plan’s specifics and its implications for local economic development. He drew attention to the robust nature of the plan, which is rooted in data and local input, and emphasized New Ulm’s strengths, such as a strong labor force participation rate and minimal unemployment.

The discussion also delved into the need for a focus on housing and workforce development to prepare for future economic changes. Concerns were raised about the community’s educational attainment lagging behind the state average, potentially hindering its ability to transition into new economic sectors as traditional manufacturing jobs decline.

Another topic was an incentive program proposed to enhance New Ulm’s downtown density through infill development. The board acknowledged the need to define criteria for investment in underutilized sites, such as excess parking and government properties, to increase urban density. The suggestion to pause the home buyer program, given the current housing demand, was also considered, with a focus on being more strategic with fund distribution.

The meeting also reviewed the EDA’s approach to supporting second-stage companies, defined as those with five employees and two million dollars in revenue. Discussions centered on determining the criteria for identifying these companies and the types of support they require, with options including engaging an outside firm or utilizing local resources for marketing and financing assistance.

Concerns about maintaining the unique European aesthetic of downtown New Ulm were raised during discussions about tourism and hotel development. Emphasis was placed on ensuring that any new developments enhance rather than detract from the town’s charm. The EDA acknowledged the need for high standards in potential hotel projects to positively contribute to the local economy.