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Morris EDA approves economic development loan for Mi Mexico owners

Clarification: The headline of this post originally stated that the Morris City Council approved an economic development loan to the owners of Mi Mexico. This was inaccurate. Members of the city council also act as the city's Economic Development Authority, and were debating in that capacity when they approved their portion of the loan package. The headline and story have been changed to reflect that distinction. 

MORRIS – Mi Mexico is on the way to Morris.

On Tuesday, the Morris City Council, acting as the city's Economic Development Authority, approved their portion of a loan package that will help owners Juan Cid Guadarrama and Stephanie Cid open a Mi Mexico in Morris, perhaps as early as this May.

Michael Haynes, executive director of the Stevens County Economic Improvement Commission, presented the loan agreement to the council.

The Cids own two other restaurants, Mi Mexico in Benson and Los Primos in Willmar. The Cids plan to lease space in City Center Mall that previously housed a Chinese restaurant and will bring in their own furniture and equipment for the restaurant, Haynes said.  

“If all the financing goes into place, they might be open by May,” said Haynes.

The total loan package for the agreement is $180,000: $72,000 from Riverwood Bank, $45,000 from the city of Morris’ Revolving Loan Pool, and $45,000 from SCEIC. The Cids will contribute 10 percent equity or about $18,000. The loan from the Revolving Loan Pool will be offered at a one percent interest rate over 10 years.

The proposal initially faced opposition from several council members, who thought that money coming from the city of Morris was from city taxpayers rather than a dedicated economic development fund.

Council members Brian Solvie, Kevin Wohlers and Bill Storck argued that investing in a restaurant was a risk they were concerned about taking with taxpayer money.

After Haynes explained that the Revolving Loan Fund is actually a fund separate from existing tax dollars, the discussion shifted in favor of the request.

“The purpose of this Revolving Loan Fund is to assist businesses to start and it takes risk to do that. That’s why the funds came from the state – they’re not part of the tax dollars in our local taxing system,” explained Haynes.

“This money gets repaid and it keeps rolling – it’s come from funds from the state to get businesses started,” added council member Jeff Miller. “The interest rate, we pretty much lowered down to try and get these businesses to help them out to get started.”

The money in the city’s two existing economic development funds cannot be used for grants or other city business, added City Manager Blaine Hill. The pools are designed to be used for gap financing, to fill in the difference between what a bank is willing to loan and what a business owner can afford to invest. In this case, the minimum owner investment is 10 percent of the total loan.

SCEIC has a loan committee that is charged with reviewing loan applications to make recommendations.

“These are owners that didn’t borrow any money to do their first three businesses,” said Hill. “It’s not an unknown commodity coming in here. … They were going to move into City Center Mall but because the Chinese restaurant closed. They had to redo everything in that place to bring it into current compliance.”

Because of the restaurant closure, the project went from a turn-key project into a major renovation and update for the space, which resulted in the need to borrow money, Hill said.

The owners of City Center Mall are also making renovations to the space to make it fire and health code compliant.

Haynes told the council that the loan is risky but is being spread out among different lenders. And ultimately, bringing Mi Mexico to Morris will help money stay in the community.

“People were going to Benson to Mi Mexico anyway – let’s stop them from doing that,” said Haynes. ‘I don’t have anything against Benson, but I prefer Morris and Stevens County.”

Neighborhood Commercial zoning district approved

Thirty days from today, the city of Morris will have a new zoning district that blends commercial and residential uses.

On Tuesday, the Morris City Council held a public hearing on Ordinance No. 95 before unanimously approving the Neighborhood Commercial District. The first place the district will be implemented is along the north side of Seventh Street between Columbia and Iowa Avenues.

The only person to speak about the ordinance on Tuesday, which has been under review for six months, was Sid Wilcox, one of the original business owners to bring up problems with the zoning in the area.

Wilcox thanked the city council and planning commission for “admitting they made a mistake” when the city zoning map was amended in 2011, but said the new ordinance is “a long ways” from what the group of business owners in the area wanted.

Wilcox also urged the council to consider term limits for members of the planning commission so there would be more opportunities for new members to join.  

“I think that when names are to be presented they should all be brought in and interviewed,” said Wilcox. “You guys are gonna run for office, they should have to run for office too.”

Wilcox also criticized the city council for agreeing with the planning commission.

“The way it is right now, you guys don’t read – whatever they bring to you, you rubber stamp,” said Wilcox. “You don’t look it over. I think they have way too much power.”

The text of the ordinance is printed in today’s edition of the Sun Tribune and will go into effect in 30 days.

Other business

  • Council member Kevin Wohlers asked that city officials review parking along Highway 9 near the intersection with Eighth Street. Wohlers said a constituent came to him with concerns about safety making turns on to the highway when cars block visibility.

  • The council renewed the consumption and display permit for Crystal Lakes Entertainment Center in Morris.

  • The council scheduled their first meeting in April for Tuesday, April 8 at 8:30 a.m. at Morris Area High School. The council traditionally holds one meeting per year at MAHS for students to observe.

  • City Manager Blaine Hill told the council he is working with two interns from the University of Minnesota, Morris to work on a wage and benefit study for the city.