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Worthington City Council denies request to forgive portion of PurNet loan

Action was taken during Monday evening's council meeting.

Worthington city hall
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WORTHINGTON — The Worthington City Council denied a request during its Monday night meeting to partially forgive a loan to PurNet Real Estate LLC.

Darlene Vortherms, who founded the company, asked the city to accept a final payment of $66,359.96 (approximately 59% of the remaining loan balance) and forgive the remaining $46,797.41.

PurNet had obtained a $142,120 loan from the city of Worthington on Sept. 15, 2015. The loan was made at 5% interest for a term of 20 years as a way to assist Vortherms with financing for a new building in the city’s bioscience park.

Terms and conditions of the development contract stated that the city would forgive each and every payment due as long as Vortherms abided by the terms of the contract, loan agreement and promissory note.

The loan balance, as of Sept. 15, was $113,157.37.

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The loan agreement also states that the city shall discontinue forgiveness of the monthly payment upon sale, assignment or transfer of the development property, and that Vortherms would be obligated to make each and every monthly payment of principal and interest.

City Administrator Steve Robinson said partial forgiveness of the loan would be an unusual precedence.

“I don’t see how we can even consider this,” said Mayor Mike Kuhle. “I think it should go back to 2018 when she sold the business. Beyond that day she could not guarantee the jobs (she intended to create).”

Councilwoman Alaina Kolpin agreed, saying Vortherms breached the contract with the business sale in 2018.

The brief discussion led to a unanimous decision by the council to deny Vortherms’ request for loan forgiveness.

Aid approved for taxi service

The City Council also approved a $2,500 per month contribution to the local taxi service for the remainder of 2021. The funds will come from the city’s American Rescue Plan Act allotment, and will offset losses the taxi service has experienced due to decreased ridership during the COVID-19 pandemic. The existing five-year contract with the taxi service expires at the end of this year, and it isn’t yet known if the provider will continue in operation.

Councilman Chris Kielblock said the transit committee is opening up a request for proposals for a new contract.

Honorary Councilman Salvador Adame said he is concerned about a potential loss of the taxi service.

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“There are a lot of people out there that drive without a license,” Adame said. “They can’t get a license and they need to drive. A lot of people use the taxi service, and if we don’t have it, it’s going to be worse.”

Kuhle agreed that maintaining a taxi service in the community is important.

“Everyone sees the value of the taxi service,” Kuhle said. “You have to have someone willing to do it, and someone that’s willing to fund it.”

In other action, the council:

  • Approved a request from Minnesota Energy Resources to install natural gas utility wireless meter reading technology on a city-owned natural disaster siren pole near Elmwood Avenue. The pole is one the city planned to remove as it replaces storm sirens in the community. Once the sirens are replaced, the city will have five, rather than nine sirens.

Minnesota Energy Resources will be charged a one-time $500 administrative fee, and will be responsible for future maintenance of the pole.

  • Agreed to order the entire plat be completed for the Glenwood Heights Second Addition.

Once something is platted, Robinson said it’s generally expected that infrastructure be installed within 12 months. He asked that the city be exempt from providing infrastructure for the entire site within the one-year timeframe.
“The reason we’re requesting to plat the entire development is so that people can see what it will look like in the future,” Robinson said.

  • Awarded the 27th Street extension project, which involves reconstructing 1,270 feet of street and installing a 32-foot concrete surface, to Wicks Construction Inc., of Decorah, Iowa. Wicks was the lowest of two bidders for the project, bidding $393,163. The engineer’s estimate for the work was $448,270.

  • Approved a purchase order for a new single-axle plow truck at an estimated $40,000. The truck will replace a 2004 model in the department.

  • Authorized an upgrade in plans for an enclosed water slide for the city’s new outdoor pool facility under construction at the Worthington Area YMCA. A translucent slide was recommended, which results in increased costs of $15,000.

  • Accepted a $424,704 grant from the Federal Aviation Administration for airport improvements.

Related Topics: GOVERNMENT AND POLITICS
Julie Buntjer became editor of The Globe in July 2021, after working as a beat reporter at the Worthington newspaper since December 2003. She has a bachelor's degree in agriculture journalism from South Dakota State University.
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