Winnebago City Council has decided to pay a North Dakota law firm several thousands of dollars to collect a past due Economic Development Authority loan of more than $57,000.
Council members voted Monday night to pay Olson & Burns, P.C., of Minot, N.D., a retainer fee of $4,000 to begin a mortgage foreclosure.
“I’ll get to work on it right away,” City Attorney David Frundt told council members.
Last year, the EDA approved a $60,000 loan for Fredonia & Luella’s Seafood Restaurant to be located at the former Tasty Treatz site on South Main Street,
For more than six months a sign in front of the building touted that seafood would be “coming soon” to the city.
City Administrator Chris Ziegler says the EDA loan was to be used for operating expenses and any improvements needed to the building
Ziegler says one of the owners, Nancy Delmaire, used land she inherited in North Dakota as collateral. He told council members a realtor recently appraised value of the property at $62,000.
Balance of the Fredonia loan is $57,279 and it is past due. The last payment was made on July 8.
Ziegler says Delmaire and Glenn Abbott also obtained a loan from First Financial Bank in Winnebago for the property, house, business building, fixtures and equipment.
Bill Erickson, president of First Financial, would not say if the bank loaned the couple any money and if any collection efforts are under way.
“If I had anything to offer on this subject, I couldn’t due to confidentiality and private policy requirements,” says Erickson.
In other business, the council approved issuing bonds to purchase two buildings from Kaduce Plumbing for $290,000.
The buildings are located just outside of the city north on Highway 169 and will be used by the Public Works Department.
Ziegler says the current building used to store street, water and sewer department equipment does not provide adequate space.