Council OKs block grant application

Tuesday, March 16, 2010

The Community Development Block grant the city is applying for to benefit 21st Century Systems is different than the county's revolving loan fund.

The McCook City Council unanimously approved Monday night at its regular meeting the application for a $505,000 CDBG grant, the Memorandum of Understanding and a resolution that allows the mayor to sign all grant related documents.

The city is requesting the CDBG Economic Development funds on behalf of the software application company 21st Century Systems Inc.

The company will occupy the entire fourth floor of the Keystone building. The building is now being renovated by the McCook Economic Development Corp. into a business center.

Of the amount requested for 21st Century Systems Inc., $300,000 will be used to build a data center in the basement of the Keystone.

Additionally, $200,000 will go toward the purchase of the equipment and furnishings for the data center and $5,000 to administer the grant.

21st Century Systems Inc. and lenders will provide $700,000 in matching funds. The total cost of the project is $1.2 million.

21st Century Systems will pay back $250,000 of the loan. The other $250,000 will be forgiven if 21 new jobs are created within three years, while retaining the seven positions currently in McCook.

In response to a question by Mayor Dennis Berry, Rex Nelson, director of the MEDC, said this is different than the county's revolving loan fund as money paid back by 21st Century Systems Inc. will go to the state and federal government and not to a revolving loan fund.

The county's revolving loan fund was started with a CDBG grant to two local dairies. The funds were paid back by the dairies to the county's revolving loan fund, and these funds are used for other businesses requesting loans.

"So if this whirly bird doesn't fly, the city is not on the hook," Mayor Dennis Berry emphasized.

Councilman Aaron Kircher added that the grant is similar to what the city did for Valmont, with half the loan forgiven with new jobs created.

Councilman Lonnie Anderson added that no city money is used, but that the city will be compensated with $5,000 for administrative fees.

The CDBG grant is not a new concept for this project but has been in the works for at least three years now, Nelson said. 21st Century Systems is investing more into the community than before and the grant is "a piece of the puzzle."

"All the pieces have come together," Nelson said.

In response to a question by Councilman Anderson, Nelson said the renovation of the Keystone should be "substantially completed" by June, with plans to occupy the building by August.

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  • "Whirly Bird" - nice.......

    -- Posted by blueCollarWorker on Tue, Mar 16, 2010, at 3:21 PM
  • Why be so forgiving on 250K? Who is on the hook if the software company goes south??

    -- Posted by edbru on Tue, Mar 16, 2010, at 9:42 PM
  • They come from the U.S. Department of Housing and Urban Development and are largely used at the discretion of the state and local governments. The Federal Government is taking a risk on McCook and 21st Century Systems. Still comes from tax payers and all, but this money will be utilized somewhere else if not here. 21 new jobs will have a significant impact on McCook. Especially at the salaries 21st Century Systems has stated and the hires have to be low to moderate income families that they have to hire as specified by HUD.

    -- Posted by blueCollarWorker on Wed, Mar 17, 2010, at 8:24 AM
  • I hope they hire people from the McCook area and not bring them in from somewhere else. I've seen this happen in the past. It would be a boost to the people in town if they do. Maybe the city would get more business in town to help with the unemployment. We need it. The population hasn't seen a significant increase in some time.

    -- Posted by edbru on Wed, Mar 17, 2010, at 10:45 PM
  • Yes edbru it would be great if they hired local people, but they will need to be qualified for the positions. Hopefully we have enough qualified locals, but if not, it will also be nice to have new families moving into McCook, with jobs that pay well. It seems that for far too long, the local governments were run by the good old boys, that never wanted new industry in McCook, because then they might have to pay a decent wage! Thankfully many of that type of "city father" or "county father" are no longer running our local governments. Yes there are still a few, but they are now the minority not the majority.

    It's great to see a progressive business expanding in our city.

    -- Posted by goarmy67 on Thu, Mar 18, 2010, at 11:05 PM
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