At a May 13 meeting, the Le Center Economic Development Authority voted to support an extension to Le Center’s disaster relief loan program which would allow businesses owned by Le Center residents within 2 miles outside city limits to apply for a loan. The loan program is intended to help local businesses which have suffered due to the onslaught of the COVID-19 pandemic.

Currently, the Le Center restricts loan applications to licensed businesses within city limits. Such establishments can seek up to $10,000 in relief to cover up to two months of expenses. However, the EDA began reevaluating this rule after receiving interest from The Little Dandy Bar and Grill. The establishment is a county business and located outside the city, but it’s owner is a city resident.

At the meeting, Le Center Mayor Josh Frederickson expressed concern with changing the guidelines. He worried that doing so could open up the loan to many county businesses which are not part of the city of Le Center’s tax base. He also pointed out that the city wouldn’t wish to assist businesses in other communities, like Mankato, simply because they are owned by Le Center residents.

“Let’s play devil’s advocate on this a little bit,” said Fredeickson. “[The Little Dandy] gets the benefit of not being in the city, allowing him to have a full liquor license which would not be allowed in the city limits. So he’s getting benefits by being a county business. It’s almost like having your cake and eating it, too, at some point.”

“My argument isn’t about The Little Dandy, it’s about all the other businesses this could get potentially opened up to,” he added.

City Councilor Christian Harmeyer felt that this wouldn’t be an issue as long as the city limited loans to businesses within a set distance of the community. Even if they weren’t in the city, Harmeyer said those businesses can still contribute to Le Center’s economic development.

“If we have that distance where we can say, ‘Alright, if you’re within this distance, then I don’t see that being a bad thing,’” said Harmeyer. “I do believe that a lot of people do come to Le Center because of that establishment. Not because of who owns it, but because of what they do there.”

EDA Board member Greg Traxler added that because the city was offering a loan, it wouldn’t be costly to include select businesses outside of city limits and the city could make money so long as businesses could still afford to pay it off. The loan itself is interest-free during the first year, but recipients must pay 2% interest starting on year two. Businesses then have to make their first payment within 13 months and would have to pay off the loan in its entirety in five years.

“We’re talking about a loan here,” said Traxler. “The city is literally going to make money on this. I don’t see why anyone couldn’t have it if they live in town and are a resident and they literally have a Le Center address.”

The EDA unanimously voted for the extension, but in order to go into effect, the extension must be approved by the Le Center City Council at the June 10 meeting.

Reach Reporter Carson Hughes at 507-931-8575. ©Copyright 2020 APG Media of Southern Minnesota. All Rights Reserved.

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