St. Peter EDA recommends loan extension for child care center

St. Peter's Economic Development Authority recommended a two-year extension on a balloon payment for St. Peter Community Childcare Center during its Thursday meeting.

The EDA extended a $35,000 loan to the center in 2007, which originally had a balloon payment due in 2013. That end-of-loan payment was extended three times for either one or two years. The center, which had experienced significant financial difficulties, has largely righted the ship and has been consistently paying $300 per month as well as back rent owed the city and debt owed Gustavus Adolphus College.

The center has never been late on an EDA payment, Community Development Director Russ Wille said.

"They have budgeted funds for payoffs in 2016 and have accelerated the paybacks with Gustavus," he said.

The center signed a lease on Tuesday for two additional rooms at the St. Peter Community Center, which are currently used by St. Peter Public Schools Early Childhood and Family Education. The school district will move those programs to the current middle school/high school once the renovation of that school is done this summer. The childcare center now has infants and toddlers in a trailer by the Gustavus campus, while preschoolers and pre-kindergarten students are at the community center.

"This will allow us to consolidate two facilities into one," said Brad DeVos, who is the nonprofit center's treasurer. "The two facilities allowed us to expand over the years but now, in an environment with three child care centers, it's imperative for us to consolidate."

He said he thought this would be the final two-year request for a balloon extension. The loan has a $13,400 balance. DeVos said the center has reserves now that could cover it, but its board wanted to hold off while the transition occurs.

Authority Chairman Bob Southworth asked if the center would have increased capacity.

DeVos said it will have space for eight additional infants and 14 toddlers. Its current, large room in the community center could be split, which would allow it to add 10-15 preschoolers, too.

"Now we have a 74-student capacity," he said. "With the consolidation and renovation, we would have around 110."

Authority member Jay Hansen said, "I have heard the negative of dropping one child here and one child there."

DeVos said, "We have lost families over that."

Authority Member James Dunn asked about a planned negative balance for the year's budget.

DeVos said that is a small amount, due to plans to pay off the Gustavus debt.

Dunn, who acknowledged that his children use another child care center, encouraged the authority to consider amortizing the debt over the remaining two years.

"I'm concerned about the track record of three extensions of balloon payments," he said.

That would increase the payments to $546 per month, Wille said.

"I understand the concern, but we would like to keep it about even just through the transition," DeVos said.

Instead, the authority board opted to apply a prime mortgage rate, 3.75 percent, to the loan. Interest will be included in the $300 per month payments. The authority board voted 4-1, with Dunn opposed. The City Council will consider the balloon extension at an upcoming meeting.

"They've done a good job of improving the finances," Hansen said.