Grand Forks Committee of the Whole gives quick nod to Fufeng’s financial security – Grand Forks Herald

GRAND FORKS — City council leaders voted 5-1 on Monday to give quick approval to financial security to bring the Fufeng Group to the city.

This failsafe is a “letter of credit” – a document that will allow the city to raise up to $5 million from Chinese agribusiness if its corn mill project fails. Already, city leaders point out, Grand Forks is estimating $1.6 million from the consultants studying the project. This is precisely the kind of upfront cost that can be recovered if the deal fails.

The decision came at the city’s full committee meeting, which is attended by all city council members but delves more deeply into individual points than large formal council meetings. The full committee cannot make final decisions; instead, the committee simply reviews city business, leaving actual decision-making to later council meetings.

Monday’s meeting was remarkably calm, with no angry denunciations from the Fufeng group or the city – a feature of the process in recent weeks as the city annexed the future site of Fufeng and its neighbors.

RELATED:

Moments before Grand Forks City Council’s 6-1 annexation vote, speaker threatens to ‘fall on that table’

The city will end up spending tens of millions more on infrastructure projects related to the project, especially once state grants and federal funding are added. What is the city’s protection for these expenses?

“We’re not going to move forward with these (bigger) projects without Fufeng moving forward with his investment,” city administrator Todd Feland said. “The letter of credit was for some of those preliminary costs before Fufeng went ahead with the construction of his facility.”

The letter of credit is with MUFG Bank, which is the largest in Japan. Feland points out that the bank is subject to US banking law, which was a crucial part of the deal.

“They have more than met our requirements with a very large financial institution that has the qualifications we are looking for,” City Council Chairman Dana Sande said at the meeting. “So that’s great.”

The only dissenting vote on Monday came from Katie Dachtler. Jeannie Mock was absent.

Dachtler could not be reached for comment after the meeting. It represents Ward 2, which after redistricting was expanded to include large parts of the city’s northernmost border, where many landlords oppose the project.

Full approval from city council is expected as early as next week.

About Scott Conley

Check Also

Form 424B5 MIZUHO FINANCIAL GROUP

Filed pursuant to Rule 424(b)(5) Registration number 333-266555 The information contained in this preliminary prospectus …