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Downtown Moorhead group to lead city's economic development

MOORHEAD — The city of Moorhead will contract with Downtown Moorhead Inc. to provide citywide economic development services, City Manager Chris Volkers told Economic Development Authority board members in a nearly hour-long special meeting Thursday, Sept. 13

Volkers said the city will be working primarily with Derrick LaPoint, president and CEO of DMI.

She said LaPoint will be acting as the city's economic development director, assisting her and Assistant City Manager Dan Mahli to help current businesses grow and in attracting new businesses and industry.

"We've had a great relationship. .... We've built a level of trust," Volkers said, adding that LaPoint and Downtown Moorhead Inc. will do a good job for the city.

"We believe this is a very efficient way of doing it," Volkers said. "We don't always have to be the experts" on all economic development issues.

While Volkers said she has the authority to hire for the economic developer position, she said she will bring the contract to the City Council on Monday, Sept. 17, for that body's approval.

Downtown Moorhead Inc. will be paid $100,000 per year, Volkers said, a savings over the $126,000 in the EDA budget for the post.

Volkers said the contract will run three years, with the option for two additional one-year terms. There is also a 90-day opt-out for both sides if the arrangement doesn't appear to be working.

The city has been without an economic development director for months.

The previous economic development director, Cindy Graffeo, resigned in June. Graffeo, who was working for the EDA at the time, declined to continue working in the post after the City Council voted to bring her position under the control of the city - a move opposed by some business leaders.

While Graffeo didn't offer specific reasons for stepping down, she had cited issues of control and ego in her decision to leave after 2½ years on the job.

The Economic Development Authority board was also told Thursday that Graffeo's pay and severance package would be paid out of EDA reserves, something EDA Chairman Charley Johnson said was a surprise.

Johnson said the decision to hire Downtown Moorhead Inc. to handle economic development highlighted the issue of whether the EDA would have a true say in economic development.

"How is this better? And who is his boss?" Johnson asked Volkers.

Johnson asked who LaPoint would work for: the whole city or downtown Moorhead business interests? He asked who might get priority if a business was looking for a large space, the long-vacant Sam's Club near Interstate 94, or the recently emptied Herberger's store in downtown's Center Mall.

LaPoint said he would be working for all.

"We're not here to broker the spaces," LaPoint said, but to provide businesses with contacts they could use to make decisions.

Mayor Del Rae Williams worried that hiring DMI would bring fewer resources to bear on economic development.

Volkers countered that the city will add a planner position dedicated to economic development and create a staff team for development.

Former Scheels CEO Steve D. Scheel said he believes LaPoint will do well for he city.

"We (DMI) chose Derrick and I've been nothing but super impressed," Scheel said.

Lisa Borgen of American Crystal Sugar said LaPoint's abilities could bridge gaps between the downtown and city development groups.

"I think it's an opportunity for us ... to take the risk to trust one another," Borgen said.

Johnson said the EDA board didn't want to be obstructionist, but worries have arisen over the EDA's function and authority.

"There doesn't seem to be any need for us," Johnson said. "You can say you trust us and our expertise, but that doesn't appear" to be.

LaPoint said unity of purpose will be needed.

"If we're going in different directions, we're dead in the water," LaPoint said, citing competition from other cities in the region.

Helmut Schmidt

Helmut Schmidt was born in Germany, but grew up in the Twin Cities area, graduating from Park High School of Cottage Grove. After serving a tour in the U.S. Army, he attended the University of St. Thomas in St Paul, Minn., graduating in 1984 with a degree in journalism. He then worked at the Albert Lea (Minn.) Tribune and served as managing editor there for three years. He joined The Forum in October 1989, working as a copy editor until 2000. Since then, he has worked as a reporter on several beats, including K-12 education, Fargo city government, criminal justice, and military affairs. He is currently one of The Forum's business reporters.

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