Minutes - Council Work Session - 03/10/2026

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City Administrator Hagen noted that the organization is currently spending a substantial amount on leased space, and the proposed project would allow them to reduce or eliminate those lease payments. Instead of paying rent to another party, those funds could be applied toward a mortgage payment on their own facility. City Administrator Hagen added that the bank’s involvement provides an additional level of assurance, since the bank would not approve financing unless it believed the project was financially viable. He also explained that the funding source the City is considering is very flexible. Technically, the City could provide the funds as a grant, but instead, the proposal is to structure the assistance as a low-interest loan. He stated that this approach allows the City to help the project move forward, eventually receive repayment, and reinvest those funds into future community projects. Mayor Heineman stated that the organization has a long history, noting it has operated successfully since 1979. He explained that while the group does not have a history of owning and operating a building of this type, it has previously leased its space and has financial records showing its profit and loss performance. Councilmember Riley referred to the staff’s suggestion that the City make its action contingent on the organization's approval of bank financing. He asked whether that approval was expected to occur the following day. Economic Development Manager Sullivan responded that the bank is scheduled to meet the following day and that the City should have more information after that meeting. He confirmed that the outcome of that meeting will determine whether the financing moves forward. Councilmember Riley stated that he believes the City should make the process contingent on the organization receiving approval for bank financing. He said the City should avoid spending approximately $30,000 on the redevelopment planning process if the project ultimately does not move forward. Councilmember Riley added that he still believes the proposal is a smart approach and expects the financing approval will likely proceed without issue. City Administrator Hagen explained that when staff first began preparing the proposal, they did not expect the planning costs to be as high as the estimates recently received. He also noted that the timing of the bank’s decision was uncertain, as it was unclear whether the bank would take a week, a month, or longer to finalize its approval. City Administrator Hagen stated that the goal of bringing the item forward was to obtain City Council consensus so staff could begin the process quickly once the bank financing decision is known. He explained that this would allow the City to move forward and incur the planning costs at the appropriate time, depending on when it makes sense after the bank’s decision. City Council Work Session / March 10, 2026 Page 14 of 21