HRA approves amended loan terms with Edina Chamber of Commerce to ease repayment

Edina Housing and Redevelopment Authority members voted April 10 to approve a second amendment to a 2022 drawdown loan agreement with the Edina Chamber of Commerce that extends repayment terms and adds modest administrative costs.

The amendment, recommended by Bill Neuendorf, Economic Development Director, extends the loan amortization from seven years to 15, keeps the 2% interest rate, raises the outstanding balance by roughly $5,000 to cover internal legal costs, and shifts semiannual payments to July and December at about $18,000 each to reduce near-term cash-flow pressure on the chamber.

Why it matters: The HRA issued roughly $650,000 in 2022 under the Edina Spark program to remodel a vacant commercial space and operate a business “Innovation Lab.” The lab closed earlier this year after failing to develop sustainable operating revenue; the chamber remains the borrower and the loan balance is about $469,000. Board members said extending the term reduces the risk that the chamber’s repayment schedule would endanger its ongoing operations.

In presenting the amendment, Neuendorf said the loan was created during pandemic-era discussions and that the Edina Spark program and special state authorization enabled the city to use previously collected, unallocated TIF monies for job creation and space improvements. He told the HRA that staff negotiated a simple amendment to ensure repayment without “unduly hinder[ing] the ongoing operations and success of the chamber.”

Shelly Loberg, President of the Edina Chamber of Commerce, described internal budget shifts the chamber will use to meet the new repayment schedule. “We have decided to make a shift of spending 60% of staff time and resources on Explore Edina marketing campaigns and visibility in the community,” Loberg said, adding that Explore Edina will cover roughly 60% of rent and related salaries so the chamber can set aside funds for semiannual loan payments.

The chamber’s past board chair, Paul Moody, said the organization performed financial analysis with staff and board members before requesting the amendment. “It is our absolute intention to pay this debt back,” Moody said. “We’ve changed course here and we have a plan to pay this back.”

Commissioner Risser, who pressed for details about Explore Edina’s role and hospitality-industry representation on its board, said the decision was difficult. Risser cited a lodging-tax requirement discussed during the meeting, saying that statute 469.19 3 requires 95% of gross lodging-tax proceeds be used to market and promote the city as a tourist or convention center, and said the use of lodging-tax–funded resources has been carefully vetted by staff and counsel.

Staff explained that Explore Edina operates as a program of the chamber and that legally allowable pro rata uses of lodging-tax revenue can include operational overhead for tourism-related services. Manager Scott Neal, Executive Director and City Manager, and Neuendorf said city staff and counsel reviewed the eligibility of expenses and that the chamber has been operating within those limits.

Key factual details discussed at the meeting: - Original loan: approximately $650,000 (issued 2022). - Current outstanding balance: approximately $469,000. - Interest rate: unchanged at 2%. - Amendment cost: roughly $5,000 added to the balance to cover legal expenses to prepare the amendment. - Amortization: extended from 7 years to 15 years. - Payment schedule: two payments per year, due in July and December; estimated semiannual payment under the amendment: ~$18,000. - Rent history: original term sheet cited $11,225/month for rent in 2022; Loberg said current rent is about $11,600/month and Explore Edina now pays roughly 60% of rent and personnel costs.

HRA members were told that if the amendment were not approved, the existing loan agreement would remain in effect and the chamber was past due on the January payment — a circumstance that could be treated as a default under the original terms. The original loan included terms allowing the HRA to exercise remedies such as subleasing the space or taking a controlling interest in the facility in the case of default.

After discussion, Commissioner Jackson moved to approve the amendment and Commissioner Pierce seconded. The motion carried with the majority in favor; the HRA chair announced the second amendment to the drawdown loan agreement with the Edina Chamber of Commerce was approved.

The HRA directed no additional conditions during the meeting; staff said the amendment includes a new annual reporting requirement so the HRA can track loan payments and chamber programming. Legal counsel Dorsey & Whitney prepared the amendment, and chamber leaders said they will pursue cost-cutting, new tenants for office space, increased community rentals of the facility, and outreach to county programs such as Hennepin County’s Elevate to broaden business resources.

The meeting record shows the chamber’s board unanimously supported the amendment at its April 8 meeting, though two city representatives who attend the chamber meeting said they would have abstained from that board vote if they had been present.

The HRA’s action on April 10 was the meeting’s only formal item; members noted the change in the Innovation Lab’s status and discussed Explore Edina’s budgeting and governance. The HRA’s approval does not create new funding sources; it changes repayment timing and adds oversight through required annual reports.