In order to act as the conduit of federal dollars for the Missota Paper Co., the city of Brainerd adopted a residential anti-displacement and relocation assistance plan.
The city council also approved giving the Brainerd Economic Development Authority the control to handle the loan for the city.
In December the city council approved acting as a conduit for a $500,000 loan from the Minnesota Department of Trade and Economic Development's Minnesota Investment Fund to Missota Paper Co. for its purchase of the Potlatch paper mill in Brainerd.
Potlatch and Missota are expected to finalize the sale of the Brainerd paper mill on Feb. 14.
Originally the state was providing funding for the loan out of state money, but because of budget issues, DTED is instead using funds from the federal allocation, Brainerd Lakes Area Development Corp. Executive Director Sheila Haverkamp said.
One of the stipulations of the federal application process is that the city needed to adopt the residential anti-displacement and relocation assistance plan.
The requirements of the plan include that the city council or the Brainerd EDA hold at least one meeting to discuss local fair housing issues, that the city obtain fair housing brochures from the U.S. Department of Housing and Urban Development and that the city report annually on fair housing activities that have been conducted.
"There is both a positive and negative side to federal funds," said Haverkamp. "The negative items include a more lengthy application process, but a positive is that the city would get to retain $400,000 in a revolving loan fund for future projects." Under the guidelines for funding from the state, the city would've retained only $100,000.
Dan Alexander, Missota Paper president and chief executive officer, said the switch from state to federal funding wouldn't slow down the sale process.
"I think we'll still be on schedule," Alexander said. "If we're delayed beyond (Feb.) 14th, it won't be for that reason."
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