Grand Forks Growth Fund approves loans for incoming data center, self-serve beer hall
May 25—The Grand Forks Growth Fund, at a meeting on Monday, May 24, approved nearly $500,000 in loans to local businesses, including a new data processing center, set to be among the largest users of electricity in the city.
Growth Fund Committee members approved a nearly $270,000 loan for Washington-based Core Scientific, which will set up a location in the industrial park on the west side of town. The company provides infrastructure and software solutions for artificial intelligence and blockchain users involved in mining for cryptocurrency, such as bitcoin. The loan will be used to buy down interest on commercial loans the company has taken out with Bremer and Alerus banks.
"We are super excited about coming to Grand Forks and taking this project to reality," said Jeff Pratt, senior vice president of operations and finance for Core Scientific.
The Growth Fund loan would be used to leverage a $500,000 grant from the bank of North Dakota, to set up shop in Grand Forks. It'll be a large shop as well. The company will make use of an existing structure in the industrial park, and has plans to build a second and possibly third building there. All told, the data processing center comes with a price tag of more than $100 million, the bulk of which will be supplied by company equity, and outside sources of funding. Bremer and Alerus banks have about $26 million in loans to the company.
Pratt said the company is looking at plans to offer educational programs, or partnerships with local manufacturers. The company is expected to create 14 full-time positions, with the possibility of more. Work is being done at the location, and the goal is to have the second building erected by winter, so electrical work can happen during the cold season.
In other Growth Fund news, committee members:
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Approved a $200,000 C-Run loan for Ashok and Mina Thakker, who own hotels in the city, including the Rodeway Inn, located near Columbia Mall. The hotel, like others, has been hard hit during the pandemic, due to event cancellations and the long-running closure of the Canada border. The loan will be used to install touchless systems and cover operating costs. Brandon Baumbach, of the Grand Forks Region Economic Development Corporation, said the owners believe the hotel will return to profitability when more events begin to happen. The loan carries a 1% interest rate and a 60-month term. Payments are deferred for the first year.
With approval of the C-run loan, the fund supplying those loans will have slightly more than $500,000 remaining. Collin Hanson, a community development planner for the city, said there are other businesses in the pipeline applying for C-Run loans. The program was capitalized by a $1.3 million U.S. Department of Commerce grant. Funds need to be expended by June 2022, or they could be taken back by the agency. Conversely, if all the funds are loaned out, there is a possibility the Department of Commerce could add additional funds, Hanson said.
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Approved a $30,000 start-up Grand Forks loan for the Taproom Brew Hall, set to be located downtown in the former Caulfield Studios location. The bar will have a unique "serve yourself" system, where patrons use a card to access about 30 different tap beers. The card will allow a machine to pour beer by the ounce, meaning people can have as much — within reason, since staff can deactivate an overly intoxicated customer's card — or as little beer as they want. Customers will pay by the ounce. The project is expected to cost about $165,000, with the owners providing the majority of the funding.
"You can come and sample (all the beers) or you can enjoy one, and pour yourself a full pint right there," said Joe Garceau, co-owner of the Taproom Brew Hall.
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Wrote off $18,000 in startup loans for the now closed Persephone's Floral. The company opened downtown at the onset of the pandemic, but struggled with securing various forms of federal funding, due to being new and not having an income history. Committee members agreed to write off the loan after hearing input from city staff, who had conferred with City Attorney Dan Gaustad that seeking to recover the loan could be more costly than the loan itself.
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Approved $10,000 for the Rendezvous Region Tourism Council. The organization's mission is to "build a cohesive regional tourism brand through education, marketing, and amenity enhancement" for northeast North Dakota, according to a city staff report.
All Growth Fund decisions need to be OK'd at a future Jobs Development Authority/City Council meeting in June.
