LADC OKs LRI, asphalt plant proposals
By Brent Shrum, Western News Reporter
The Libby Area Development Co. voted Thursday to recommend a second year of funding for Libby Revitalization Inc. and participation in an $800,000 financing package for a couple looking to purchase and expand Kootenai Paving.
Both of the LADC¹s recommendations will be presented to the Libby City Council for final approval.
LRI is seeking a $100,000 grant to fund operations for another year. When the group initially approached the LADC last year, it sought $300,000 for three years, but the proposal was modified to require separate requests for the second and third years.
The LRI budget includes $45,000 for administration and $55,000 to fund projects. The bulk of the $55,000 budgeted for projects last year has been spent or is spoken for, and little will be carried over into the coming year, LRI director Betty Jo Wood told the LADC board.
LRI set aside $25,000 last year to be given out in $1,500 matching grants for storefront improvement proposals and has funded 16 projects, Wood said. Plans are to offer five $5,000 grants this year.
³This year we thought quality versus quantity,² she said. ³Let¹s make some big changes in a concentrated area so people say, ŒWow, look at that.¹²
Most of those 16 projects would not have been completed were it not for the matching grants, Wood said.
³I think the majority of them, they were enticed by free money,² she said.
In addition to the storefront grants, LRI helped fund the purchase of a steel eagle sculpture by Libby artist Todd Berget for $12,000, helped establish the Libby Merchants Association, offered non-monetary assistance to a number of businesses working on improvement projects, and helped two businesses ? one new and one already established elsewhere in Libby ? move to Mineral Avenue.
LRI is also looking into hiring a firm to develop a streetscape plan for downtown Libby. The plan is expected to cost $33,000 to $45,000, said board member Mark Epperson.
Voting by secret ballot, the LADC board approved funding for LRI 5-1.
In another decision by secret ballot, the LADC board voted 4-2 to approve participation with First National Bank in a loan to George and Sheryl Niemi, who are looking to purchase Kootenai Paving from Don Brown for $800,000.
Under loan guidelines recently adopted by the LADC and based on a Small Business Administration program, the bank would provide 50 percent of the funding, the LADC 40 percent and the Niemis 10 percent. The city would make $320,000 available to the bank, which would administer the loan and provide the city with a monthly payment. At 4-percent interest for seven years, the monthly payment to the city would be $4,374.02.
The bank would be in first position in the event the Niemis ran into trouble repaying the loan. LADC member Jim Morey expressed concerns that proceeds from a ³fire sale² of equipment in a last-ditch effort to repay the loan might barely cover the bank¹s portion of the loan, let alone the city¹s share.
LADC chairman Robb MacDonald expressed more confidence in the bank¹s review of the proposal, which indicated that cash flow would be sufficient to repay the loan.
³I think the fact that the bank is willing to hang out $400,000, that¹s got to say something,² he said.
According to the proposal submitted to the LADC, the Niemis¹ purchase of Kootenai Paving would ensure the retention of eight jobs along with the generation of another eight to 10 jobs through the growth of the business.
LADC board member Mike Munro acknowledged that there is some risk associated with the loan but suggested the potential economic benefits are worth the gamble.
³I don¹t know how we¹re going to attract people to this community if we don¹t start taking some risk,² he said.