By Sara StrongThe city of Luverne is close to reaching a deal with a Sioux Falls company to expand in the former Tri-State Insurance building — creating as many as 150 to 200 new jobs.City Councilman David Hauge said Tuesday, "This is just what we need."Total Card Inc. is considering purchasing the building for $500,000.Tuesday the Luverne Economic Development Authority and the Luverne City Council met in emergency meetings to approve a purchase offer, which means negotiations will still continue.LEDA Director Dan Statema said, "There are a lot of ‘i’s to dot and ‘t’s to cross as of yet, but this is the first step."Next month there will be a public hearing on the property sale, and the council, EDA and staff will look closer at TCI’s financials in the meantime.Closing on the sale could be as soon as April 13, and the business could open in July."There are things we need to do to satisfy our due diligence," City Administrator Greg LaFond said.He said getting personal guarantees from major company players is something the city should request.TCI is a credit card company that includes sales, processing, collections and marketing in its scope of work.Statema said the information is so far just an overview of what’s to come. "There will be significantly more documentation and language coming," he said.The city will also have to get approval for the building to become a part of the Job Opportunity Building Zone, which will require swapping of land on the south and west of Luverne. JOB Zones allow for certain tax breaks for new or expanding businesses in certain geographic areas of Minnesota.LaFond said, "This indicates that JOB Zones can work. … I’m very happy for the city today."City staff felt the recent advertising campaign drawing attention to Luverne helped this deal get started.LaFond said the city council’s policies on economic development allowed staff to recruit this sort of potential business.The Tri-State building has been vacant since January 2003 when the company relocated. At that time, there were 109 employees at that location.Agreement so farNegotiations with TCI started only last week, so things are moving quickly for the city.More specifics will be worked out before the sale is approved at a public meeting, with council approval.On paper, the purchase price is actually $700,000. It was most recently appraised at closer to $1 million.The city would finance a mortgage of $500,000 for 20 years at 4.5 percent interest. The remaining $200,000 would be a loan at no interest, which would be forgivable if the company retains 150 employees in loan years three through 10.There is no word yet on wages employees would earn.Other parts of the proposal include:oThe city will provide a loan of $150,000 for roof and other repairs. (The city is looking into ways it can protect this investment if it has to buy the building back before the end of the agreement.)oThe state of Minnesota will provide a $500,000 telecommunications grant for the purchase and installation of communication systems in the facility.oThe city of Luverne will provide a $250,000 loan at 4 percent for the purchase of furniture and equipment to be installed at the office. oThe city of Luverne will provide a training grant of $24,000. In addition, the city will provide training reimbursement of $100 per employee for up to 200 employees who remain at TCI for 90 days.oThe city is providing electric service to the business at a discounted rate for up to three years.oThe city will provide additional employee incentives through reduced residential lot prices, relocation grants and reduced membership fees at the Pool and Fitness Center.oThe city of Luverne commits to working with TCI, to establish a child care facility in the immediate area of the business for employees of TCI and others in the area.
