With the mortgage on the Brainerd Mobil convenience store and gas station in foreclosure, the city of Brainerd is looking at how it can protect the balance owed on a $50,000 loan made to the store in 1999.
The Mobil station is owned by Council President Kelly Bevans. Taxes for the property are delinquent by $39,238. As it has done with several businesses, the city loaned Bevans' $50,000 for the Mobil station from its commercial revolving loan fund in 1999, before Bevans' election to the city council.
The issue was placed on the Personnel and Finance Committee's agenda by council member Bob Olson.
Bevans had paid $11,261 plus interest to date, Olson noted, and still owed $38,739. In a memo dated May 8, Olson said he wanted the council to discuss how the city could protect its loan while Bevans' property is in foreclosure, due to be put up for sale by the Crow Wing County Sheriff's Department on May 21. Bevans has the property listed for sale or lease.
During Monday's Personnel and Finance Committee meeting, City Administrator Dan Vogt noted Bevans was current with his loan payments to the city up to March.
With its loan to Bevans, the city was provided with a third mortgage on the property. In order to protect its collateral in Mobil, City Attorney Tom Fitzpatrick told the Personnel and Finance Committee that the city would have to pay off the mortgage holders in the first and second positions. Fitzpatrick also noted there's a six-month redemption period for the mortgage holder following the foreclosure sale.
The Brainerd City Council on Monday referred the issue to the Economic Development Authority by a 5-1 vote, with Bevans abstaining and Olson voting against.
"It doesn't make much sense for the council to make a decision without a recommendation from the full EDA," council member Kevin Goedker said during the Personnel and Finance Committee meeting.
Olson attempted to explain to the council why he had the item put on the committee's agenda, but council member Lucy Nesheim questioned what Olson's statement had to do with the motion to refer and Olson was ruled out of order.
MATT ERICKSON may be reached at email@example.com or 855-5857.
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