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CANNELTON – Cannelton Common Council members voted in a special meeting Tuesday to approve a $30,000 economic-development loan to help move and expand a business offering mini-trucks at a tiny lot off of Indiana 66.
As The News reported Jan. 15, Aaron Knieriem asked the Cannelton Common Council at a regular meeting three days earlier for a loan to boost his plan to move into the former Randy Aubrey Dodge property, where he will offer for sale the trucks and other equipment with names like Cub Cadet, Bobcat, Husqvarna and Troy-Bilt.
Knieriem offered a 2004 GMC truck he said was worth $20,000 and a tractor he valued at $11,000 as collateral. Mayor Smokey Graves noted their values would drop significantly in the coming years, and said the city attorney suggested a second mortgage on the Aubrey property be added to the security.
"You're looking at a 10- to 15-year loan," he said. "The vehicles will be at 25 percent of their values in about three years."
A second mortgage would be worth more than the $30,000 because of the property's location, Knieriem said.
His father, Jerome Knieriem, noted the vehicles' value will depreciate, but payments on the loan would also decrease its balance.
Not at the same rate, Graves noted, explaining he's obligated to ensure the city has an appropriate amount of collateral.
Councilman Adam Goffinet suggested the loan balance and collateral be re-evaluated in several years.
"If we're still relying on (the loan) in five years, there's a problem," Aaron Knieriem said.
The federal Environmental Protection Agency is halting the import of the three-cylinder, 45-horsepower mini-trucks as it evaluates their emissions, he told the council. A restricted supply could increase demand, he said, but his father urged council members to "call your representatives and let them know what you think of their killing jobs."
The council opted to have the city attorney draft a contract that would provide the 15-year loan at 4.25-percent interest with a review of the collateral in 36 months.