Vernon County committee denies Royal Bank request to subordinate county mortgage

The Vernon County Economic Development Committee voted June 6 to deny Royal Bank's request that the county subordinate its mortgage on Mitchell Real Estate from second to third position. The motion to deny, made by Katie Helseth and seconded by Bruce Kilmer, was approved unanimously.

Amy Oliver, Community Development Director, presented the loan-program update on behalf of Jon Bingol, the county’s economic development loan administrator, reporting an ending balance for the program of $394,111.20 and total outstanding loans of $529,893.25. Oliver said Royal Bank currently holds a first-position mortgage of $1,000,000 on the property and that Vernon County holds a second-position mortgage of $250,000. Royal Bank had asked to take second position on an additional $400,000 loan, which would have pushed the county into third position on the new loan.

Committee members discussed potential impacts to the Mitchell Real Estate project if the county declined to subordinate. Katie Helseth and Tom Weston both shared their perspectives during the discussion. After debate, the committee voted to deny the subordination request, preserving the county's second-position lien on the Mitchell Real Estate loan.

The loan update included a note that the closing for the Country Chicks loan remains in progress and is awaiting an appraisal. No loans were reported paid off since the previous meeting.

The committee took no further action on the Mitchell Real Estate matter beyond the denial; no numeric amendments to loan documents or timelines were announced at the meeting.