A loan business opened in West St. Paul. It might not be allowed to be there.

A stretch of Robert Street in West St. Paul is home to Dairy Queen, Little Caesars Pizza, R&B Liquors and a recent addition: LoanMax Title Loans, a company with locations around the country that loans money with car titles as collateral.

There’s one potential problem: LoanMax might not be allowed to be there.

Seeking to “create an impression” on the city’s small commercial strip, West St. Paul limited where “alternative financial establishments” — the city’s term for certain check-cashing, money-transmitting, high-interest payday loan businesses and the like — can operate more than a decade ago.

So now, in response to complaints, the city is trying to figure out what exactly the business does and whether it needs to move out.

“There are some components that might be permitted under kind of general banking and mortgage servicing,” West St. Paul Development Director Benjamin Boike said, “but some uses that, we believe, fit that definition of alternative financial.”

LoanMax did not return a request for comment. CB Ventures LLC is listed as the owner of the property in Dakota County records. The LLC is registered to former Minnesota Vikings player and lieutenant governor candidate Matt Birk. He did not return a request for comment through Matt Birk and Company, LLC.

LoanMax opened late last year at 1098 Robert St., near the intersection of Butler Avenue.

Not long after the location opened, the city started receiving complaints from people who said the business shouldn’t be there, first reported by the West St. Paul Reader.

LoanMax is located in what West St. Paul calls its Gateway North mixed-use district. The city outlines a list of 52 permitted business types in this area, including antique stores, bike shops, restaurants, phone sales, garden supply stores and tanning salons, plus businesses allowed with special permitting. Alternative financial establishments aren’t among them.

Boike said it’s typically up to businesses or landlords to make sure a business comports with zoning rules. Unless the business requires a conditional use permit, the process doesn’t require city pre-approval, he said.

City Planner Melissa Houtsma said in an email that she talked with a representative of the business or landlord last year and what they described at the time sounded like plans for an office use.

Houtsma said she sent a compliance letter outlining the zoning issue to an address listed on the county property records that came back as “return to sender - vacant,” so she sent a letter to the property itself.

LoanMax, which operates in 26 states, lets patrons borrow up to $10,000 against the title on their vehicle, according to its website.

The city is talking to LoanMax attorneys to decide if what the business does disqualifies some or all of its operations from being located in the area.

West St. Paul voted in 2012 to limit where alternative financial establishments can be located.

Such businesses aren’t allowed on the part of Robert Street where LoanMax opened. They are allowed south of there, provided they get a permit from the city and are at least 800 feet from other alternative financial establishments, pawn shops, “adult uses,” body art businesses, bingo stores, used merchandise and discount stores.

“We’re just trying to strike a balance,” Council Member Jim Englin said when the city restricted the businesses. “We don’t want to see Robert Street become the check-cashing capital of the metro area.”

Alternative financial businesses, including auto title loan businesses, are controversial, and many cities have moved to limit their presence.

The Urban Institute found they are more often located in low-income and minority neighborhoods.

Research from Pew Charitable Trusts in 2015 found title loans less widely used but similar in structure to payday loans, often involving high interest rates.

“When the loan comes due, borrowers who cannot afford to repay can renew it for a fee. As with payday loans, payments exceed most title loan borrowers’ ability to repay — so the large majority of loans in this market are renewals, rather than new extensions of credit," the research found.

Pew found between 6% and 11% of title loan users had a car repossessed annually.

When it comes to LoanMax, Boike said the city will decide what to do once it determines whether the business’s services do or don’t fit the zoning.

If they don’t fit there, Boike said: “Basically, we work with them on a timeline to vacate if that’s the case and find a location in the city that works for them.”