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City proposes line of credit to Regals to cover marina repairs

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Many boats at the Regal Marina in Prairie du Chien (pictured here in early May) sat ashore longer than usual this season awaiting the opportunity to slip into the docks. (Photo by Correne Martin)

By Correne Martin

The Prairie du Chien Common Council extended an olive branch to Regal Marine Group Tuesday night, as an effort to resolve the safety issues that have left the business stagnant this season.
The council voted to offer a line of credit to the Regals to help them accomplish the estimated $74,000 in repairs and improvements needed to satisfy state code mandates. Terms of the loan would include classifying the Regals’ buildings and docks on the city-owned property as collateral.

There is no indication yet regarding whether the Regals will accept the terms of the loan. According to City Attorney Lara Czajkowski Higgins, the Regals’ attorney emailed her an hour before Tuesday’s regular council meeting, saying they’re potentially interested in such a loan but they need another week to determine a more exact figure of cost estimates.

The city cut electricity to the Regal Marina docks on May 1, as directed by state inspectors. Power will only resume as soon as the electrical is brought up to standards. A May 16 Courier Press article stated that boaters had signed contracts and paid slip fees, though the status of those contracts has not been provided.

City Administrator Aaron Kramer said Regal Marine has shown motivation to comply with the state, since the business applied for a city permit on June 6. The Regals have provided the city with a letter from Freedom Bank, stating that a 10-year lease with the city for the marina property would be preferred if the bank were to consider writing a loan. However, the letter does not guarantee any plans to grant them a loan at this time.

Kramer said the city’s line of credit would likely be at a lower interest rate than any bank could provide, but the credit would be capped at $74,000. Terms of the credit line would also order that the Regals turn over receipts to the city as work is completed. Then, the city would reimburse them or pay the bills. Once the work is done and code violations resolved, the line of credit would become a loan, payable at an interest rate of 2 percent over 20 years.

“This is not just a check for $74,000,” Kramer stated, noting there would be no cost to taxpayers, as the line of credit would be paid back, with interest. “This is a proposal that is as risk-free as possible for our taxpayers while still trying to help the marina get back on its feet.”

He also noted that the state has set an Aug. 1 deadline for resolution of the code violations. “If [the city] can argue (to the state that) the repairs are being done, we might bring something to the table (in terms of extending that deadline) for them.”

When Alderman Todd Myers asked if this offer is somehow setting a precedent, Kramer responded with his rationale that this situation is quite unique. First, the marina is on city owned property. Second, the Regals are currently under a one-year lease with the city. Third, the city desires to have an operating marina property. Fourth, the city is exposed to a potential liability if the electrical issues are left unrepaired. Fifth, the city is concerned for the safety of boaters and visitors on the property. Sixth, the city desires proper restoration in the case that Regal Marine Group were to leave the premises.

“These are serious violations that are going to have to be fixed by somebody,” Kramer said. “This is the best way to facilitate those repairs being made.”

Alderwoman Karen Solomon pointed out that this proposal allows the city more ability to monitor what’s happening on the property. “This also shows a good effort to keep these guys in the community,” Solomon commented, “even after the strong comments that were made toward Aaron and the city at our last council meeting.”  

Alderman Edward Hayes-Hall didn’t agree exactly. “They’ve got a problem. Why do we have to get them the money to fix it?” He also questioned the 20-year length of the loan and the low interest rate, saying those were “very generous” terms.

Mayor Dave Hemmer answered: “We want them to succeed, and it’s beneficial to the city to have an operating marina.”

Alderman Todd Crotty concurred: “Economic development is one of our primary goals as a city and I think this shows we’re willing to work with a business as well.”

“At least we’re showing boaters and taxpayers we want a marina in town,” Alderman Nate Gilberts added.

Ultimately, the council voted 7-0 to approve the line of credit, with the exact terms to be determined upon agreement to the proposal from the Regals. Myers suggested the city look into whether the Regals have a lien on the buildings and docks already before a contract with such collateral were signed between both parties.

Kramer said the council’s decision only gives the staff the ability to enter into further negotiations with Regal Marine, regarding this proposal.

Other business
•The police department’s current tasers are almost six years old. The recommended manufacturer’s life span is five years. Recently, Taser International released a new program allowing agencies to finance their purchase of tasers over 60 months at a 0 percent interest rate.

Police Chief Chad Abram said the department has eight units at this time and if they’re traded in before June 30, they will receive a $1,200 credit as well.

Through this program, the city police would obtain 12 tasers with 24 replacement cartridges, 12 replacement batteries, 12 holsters and a five-year replacement warranty. By purchasing 12 units and equipping all full-time officers, the department will also receive a $50 credit per unit. The cost is $3,168 annually, taken from the police department’s operating budget.

•The city approved, upon recommendation of the LaRiviere Park Board, bidding this fall for timber sales of walnut and oak harvested from the park. The sales would involve 215 walnut trees, which is a mere 5 percent of the entire walnut population there, and 185 oak wilt trees that are mostly dead or dying and selected sporadically across the 300 acres.

•Co-Public Works Manager Terry Meyer informed the council that the city, in cooperation with E3 Coalition, of Viroqua, would like to install the final group of LED lights at numerous city buildings, including the aquatic park, as well as the Hoffman Hall parking lot.

“This is the final piece to the LED conversion puzzle,” Meyer stated. “We can do it now at 2016 pricing, waive the 4 percent interest, and defer payments to 2017. The estimated cost is $21,810, but considering the savings of about $7,000 per year, payback will occur rather quickly.

Meyer added that the completion of this project makes Prairie du Chien one of the first cities in the state to use entirely LEDs municipally.

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