Crosslake: Council votes to sell Crosslake Communications assets
The city of Crosslake is no longer in the business of running a business. In a special meeting Monday, May 23, the Crosslake City Council unanimously agreed to sell the assets of Crosslake Communications to Tri-Co Technologies, LLC for $6,372,000...
The city of Crosslake is no longer in the business of running a business.
In a special meeting Monday, May 23, the Crosslake City Council unanimously agreed to sell the assets of Crosslake Communications to Tri-Co Technologies, LLC for $6,372,000.
Tri-Co Technologies is a partnership of Emily Technologies, West Central Technologies Corporation of Sebeka and Rural Communications Holding Corporations of Blue Earth. Emily Technologies will handle the day-to-day operations of the company.
Tri-Co's bid on the company was one of two bids received, with the other coming from Consolidated Telecommunications Company (CTC) for $5.2 million.
Along with the bid, Tri-Co agreed to keep the Crosslake office open for at least three years, but also has no plans to close it after that point. They also have no plans for employee layoffs, but would provide severances of no less than 90 days pay and health benefits should it come to that.
Tri-Co's plan for the residents of Crosslake includes upgrading the city's existing infrastructure to increase broadband and Internet speeds to continue meeting consumer needs, with an end goal of providing all residents with fiber-in-the-home technologies.
The company also agreed to apply the same terms and conditions for employees as those currently provided, and future capital expenditures at Crosslake Communications will be funded by Tri-Co's cash flows.
Mayor Steve Roe asked management consultant John Finke what would happen to the cash currently on hand in Crosslake Communications. Finke informed the council that some of it - roughly $300,000 - would stay within the company for working capital, but most would transfer back to the city.
Crosslake Communications transferred roughly $278,000 from Crosslake Communications to the city annually to help reduce the city's property tax levy, but the city levied that money from elsewhere for 2016. Also, the company still owes roughly $2.5 million on a bond to install fiber optic cable, but a portion of the proceeds will go toward that debt in an escrow account.
In addition, a federal grant the city received for economic development will either have to be paid back or transferred to "another qualified entity."
Council member Mark Wessels thanked the Crosslake Communications Advisory Commission, the CTC management team, Finke and all those involved in the process.
"This is considerably more than we thought we could get for (the company)," Wessels said. "That valuation improved largely due to the efforts of management and the Crosslake Telephone Commission ... To improve the bottom line enough to end up netting the city roughly $1.5 million more than our best-case scenario - probably more like $2.5 million - is pretty impressive."