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Growth Fund committee approves PACE/FlexPACE support for three regional manufacturers
Summary
The Grand Forks Growth Fund Committee voted to approve PACE or FlexPACE assistance for Johnstown Bean Company, Northern Plains Railroad and Cirrus Industries to support equipment purchases and an expansion; the loans include subordinate collateral and personal guarantees, and drew questions about foreign investment and repayment terms.
The Grand Forks Growth Fund Committee approved PACE or FlexPACE loan assistance this month for three locally based manufacturers — Johnstown Bean Company, Northern Plains Railroad and Cirrus Industries — to support equipment purchases and a facility expansion.
Committee members voted to approve small Growth Fund contributions layered under larger primary loans from other lenders. The requests included a FlexPACE contribution of roughly $8,500 for Johnstown Bean, $116,511 for Northern Plains Railroad and $269,231 for Cirrus Industries; each award was structured as a deferred buy-down at 2.5% interest with personal and corporate guarantees, staff said.
Those awards follow broader financing from private lenders or state programs: Johnstown Bean is pursuing a $500,000 primary loan, Northern Plains a roughly $2.96 million financing package, and Cirrus is using a roughly $9.5 million commercial loan. Committee staff said each Growth Fund contribution would be subordinate to the primary lender and secured by UCC filings and personal guarantees where required.
“...it will be a big move for the efficiency and safety for our employees. No longer will employees have to have the limitation of being able to hold 100 pound bags or lift 100 pound bags,” Dylan Carley, general manager of Johnstown Bean Company, told the committee about a planned robotic palletizer.
Northern Plains Railroad representatives described upgrades to locomotives and track-repair equipment intended to cut fuel and labor costs and improve safety. Tom Hyde, the company’s chief financial officer, said the purchases would modernize aging equipment and support the region’s commodity transport needs.
Cirrus Industries presented a separate request to support a major 30,000-square-foot equipment expansion at its Grand Forks facility. Staff noted the project is part of a previously approved development agreement with the city and that the U.S. Air Force and Department of Defense have expressed no concerns about the proposed expansion. “The United States Air Force and Department of Defense don’t have any concerns with the proposed expansion by Cirrus,” staff noted while summarizing input from defense liaisons.
Committee discussion touched on common underwriting features: five-year deferrals on the Growth Fund piece, monthly payments thereafter, blanket UCCs on equipment, and personal guarantees from owners. One committee member pressed staff to use federal-level foreign-investment screening (CFIUS playbook) more routinely after companies said they had no foreign investors.
Votes on the three items carried. Committee minutes show a mix of unanimous and near-unanimous approvals; one member recorded a dissent during the Cirrus vote.
Why it matters: The Growth Fund assistance reduces the effective interest cost for the businesses, encouraging capital investment and local job retention. The committee framed these awards as targeted gap financing intended to leverage larger lender and owner equity contributions while protecting the local fund through collateral and guarantees.
What’s next: Borrowers must finalize primary financing, execute subordinate UCCs and meet the Growth Fund’s standard documentation before funds are disbursed. Committee staff said they will monitor repayment performance and report back on outcomes.
