Webster City council backs USDA loan application to support Edible Gardens expansion

Steven Zennig of the Iowa Area Development Group asked Webster City to authorize a municipal application to the U.S. Department of Agriculture’s Rural Economic Development Loan & Grant program to support Edible Gardens (Prairie Hills LLC).

Zennig said the program is competitive and awards up to a $1,000,000 loan at 0% interest on a 10‑year term; a municipality applies on a business’s behalf, borrows from USDA and then re-lends to the business. "It’s a $1,000,000 loan at 0% interest on a 10 year term," Zennig said, adding some borrowers may defer payments for up to two years and that an irrevocable letter of credit from the borrower’s bank is required before closing.

He told council Corn Belt Power has already agreed to sponsor an application and noted the utility intermediary can submit more than one application in some cases — meaning the project could seek two separate awards (up to $2 million total) if both applications ranked high enough.

Council members asked about municipal liability; Zennig said the muni would not be on the hook and that the bank’s letter of credit would guarantee repayment if the private borrower defaulted. Questions also covered the timing of the bank confirmation; Zennig said he would obtain the letter during the application and would not close a loan without it.

The council moved and approved a motion supporting submission of a municipal application to USDA to enable financing for Edible Gardens. The vote was by voice; the transcript records ayes and no roll-call tally.