The Koochiching Economic Development Authority Board heard several updates Wednesday, including a reiteration of a wording issue surrounding the Renewable Energy Clean Air Project funding, an update on the foreign trade zone sequencing and a report from the Small Business Development Center director.

As was discussed at Tuesday’s Koochiching Development Authority Board meeting, wording in a 2006 Minnesota bonding bill could impact RECAP because of a strict interpretation of the bill by the Minnesota Management and Budget office. The bill includes the word “construction” when discussing use of the state money.

“There is a good chance we could lose the federal money,” said KEDA Board member Mike Hanson. “That would be a disaster at this point.”

RECAP is in the feasibility study stage, and therefore construction has not yet begun. The state money granted in the bonding bill would be used, in part, to match U.S. Department of Energy funds, which have to be cleared by July 30. Without $393,600 available of the $2.5 million from the state by that time, the DOE match money would not be available.

“We’ve come this far and worked hard,” Paul Nevanen, KEDA director, said. “I’m hoping we get to the intent of the language.”

Coronal, who is the city’s partner in the RECAP, has also submitted a 300-page application to the DOE for $18 million in federal funds to be used for construction, according to Nevanen.

Coronal officials John D. Howard III and Stephen Korstad proposed solutions to the issue including: securing a new interpretation of the bill by the MMB, requesting the funds be released from MMB with the understanding that the wording would be changed by the Legislature, reevaluating cost share status with the DOE, and asking for loaned money from the MPCA or KDA until the state money was released.

The KEDA Board members and Coronal officials agree that contacting state and national leaders, including Gov. Tim Pawlenty and U.S. Sens. Amy Klobuchar and Al Franken, could lead to a resolution.

In another matter, the board heard a report from Nevanen and Dave Serrano about sequencing on the FTZ site across Highway 11 East from Ranier.

Serrano said that he recently met with representatives of the U.S. Army Corps of Engineers to finalize the sequencing process, which includes detailing to the corps why the wetland areas in question are important to have available for projects. Serrano will now begin the permitting process.

Nevanen said that the FTZ lands, jointly-owned by the city and county, could be used for business parks, including warehouses and manufacturing and distributing centers and are attractive because of their proximity to the highway and railroad and the availability of utilities in the area.

“We’re trying to get as much acreage as we could in case we get a project,” Nevanen told the board.

In addition, Nevanen said he would be working with the Department of Employment and Economic Development to research distribution centers in Minnesota, and that he would be visiting as many as he could.

The KEDA Board heard a report from Jenny Dougherty of the Small Business Development Center.

Dougherty said that the SBDC has shifted its focus from primarily working with new businesses to stabilizing existing businesses.

She said the SBDC saw 51 unique clients in the first half of 2009, compared to 40 clients during the same period last year. Of those, she said the majority were looking for assistance with accounting and financing.

The board appointed Soren Olesen of Birchdale as an alternate KEDA Board member, who would take the place of member Mike Fairchild in his absence.