Council approves $450,000 gap loan for Nelsa Properties and a smaller EDAP loan for local insurer

The Paynesville City Council voted to approve two economic development loans on motions that carried without recorded opposition.

The council approved a $450,000 EAP (gap) loan for Nelsa Properties, to be split equally with the township. City staff described the loan as gap financing for a new facility that would house Minnesota Molding and provide warehouse space for Valley Industries; the city noted the project is expected to create roughly six jobs at about $20 per hour. The loan was described as amortized over 20 years with a 10‑year balloon and an interest rate tied to the current EAP rate (cited in the meeting at 6.5%).

City staff Tark opened the public hearing and invited representatives from Nelsa Properties and the tenant businesses to explain the proposal. A company representative said the new building would be designed for blow-molding operations and higher electrical service; “this building would be designed kind of around that blow molding business so it give us the option to put in more equipment,” a representative said during the hearing.

Councilmembers discussed the balance in the EAP revolving fund and the reduction in available funds if the loan were approved; staff reported the fund balance would drop substantially but remained sufficient to proceed. After public comment closed, the council moved and approved the loan package by voice vote.

Separately, the council approved an EDAP revitalization loan for Rosi Insurance Agency (formerly Leiser Insurance) to remodel a small commercial space. The city said the program calls for a 50/50 match; staff cited a requested loan amount of about $12,150 in interest‑free EDAP funds with equal sharing by the township. The EDAP board recommended approval and the council voted to adopt the recommendation.

Next steps: staff will work with the applicants and the township to finalize loan documents and schedule closings.