DEED Awards $2M in Redevelopment and Demolition Funds to 9 Projects Across Minnesota

The Minnesota Department of Employment and Economic Development (DEED) awarded $2 million to redevelop 9 sites in eight different cities, including a demolition grant throughout Minnesota.

Redevelopment projects made possible through the grants are expected to create 74 new jobs and retain 48 jobs while providing more than 524 new housing units, 148 of which will be affordable housing units.

“The redevelopment grant program is highly sought-after because it sparks private investment and creates new opportunities for industrial, commercial, and housing development,” said DEED Commissioner Steve Grove. “These grants will also create new jobs and increase the tax base for these communities.”

The Redevelopment Grant Program helps communities with the cost of redeveloping blighted industrial, residential or commercial sites. Grants pay up to half the redevelopment costs for a qualifying site, with a minimum 50% local match required.

The program statute has specific criteria to rank projects including the redevelopment potential within the municipality, the overall need, readiness of the proposed project, the increase in tax base for the community, and the number of jobs created and retained.

Since its creation in 1998, the Redevelopment Grant Program has made 222 grant awards, which have helped fund projects that created or retained more than 29,000 jobs and generated nearly $51 million in tax revenue.

Details for Redevelopment projects being announced today are as follows:

Arlington – Seneca Building

The city of Arlington is awarded $80,500 in Redevelopment Grant funds for demolition on this 9.03-acre site. Historically used as a canning facility, this site’s large industrial building will be renovated and repurposed into two modern manufacturing/office buildings. It is anticipated this project will create 38 jobs, retain 48 jobs, increase the tax base by $107,765, and leverage $3.8 million of private investment. Matching funds will be provided by the city.

Local contact – Amy Newsom (507) 964-2378

Duluth – Former St. Louis County Jail

The Duluth Economic Development Authority is awarded $107,500 in Redevelopment Grant funds for lead abatement and demolition on this 0.6-acre site. Part of the Duluth Civic Center Historic District and formerly used as the St. Louis County Jail, the existing building will be renovated and repurposed into a 33-unit apartment building. It is anticipated this project will create 3 jobs, increase the tax base by $80,433, and leverage $7 million of private investment. Matching funds will be provided by tax increment financing.

Local contact – Jason Hale (218) 730-5331

Ellendale – Ellendale Suites

The city of Ellendale is awarded $162,481 in Redevelopment Grant funds for acquisition, demolition, and infrastructure improvements on this 2.99-acre site. First developed in the early 1900s as a farm, this site contains several dilapidated structures. It will be redeveloped into a two-story, 20-unit apartment building with the potential for a second apartment building to be constructed. It is anticipated this project will create one job, increase the tax base by $37,086, and leverage $2.2 million of private investment. Matching funds will be provided by tax increment financing.

Local contact – Kim Zimprich (507) 684-2681

Fergus Falls – Red River Flour Mill

The city of Fergus Falls is awarded $130,000 in Redevelopment Grant funds for asbestos abatement, demolition, and public infrastructure improvements on this 2.52-acre site. Historically used as a flour mill, this site will be redeveloped into a five-story, 30-unit boutique hotel. The project is anticipated to create three jobs, increase the tax base by $88,952, and leverage $4.8 million of private investment. Matching funds will be provided by tax increment financing.

Local contact – Klara Beck (218) 332-5428

Mankato – Burton Building

This city of Mankato is awarded $215,269 in Redevelopment Grant funds for asbestos abatement, building demolition, and public infrastructure improvements on this 1.2-acre site. Formerly used as a lumber mill, paint shop, battery shop, automobile sales and service garage, and most recently a bank; the site will be redeveloped into a six-story, 27-unit condominium building, and a six-story, 88-unit apartment building with 2,200 square feet of commercial space. It is anticipated this project will create six jobs, increase the tax base by $213,708, and leverage $38 million of private investment. Matching funds will be provided by the developer.

Local contact – Courtney Kramlinger (507) 387-8711

Mankato – Landmark Apartments

The city of Mankato is awarded $246,500 in Redevelopment Grant funds for asbestos abatement, public infrastructure improvements, and geotechnical soil correction on this 0.74-acre site. Formerly used as a car dealership and service station, the existing three-story building will be renovated into a four-story, 33-unit apartment building with 3,500 square feet of event space and 5,500 square feet of commercial space. This will be accomplished by adding a one-story vertical addition and a four-story adjacent addition. It is anticipated this project will create 10 jobs, increase the tax base by $113,168, and leverage $11 million of private investment. Matching funds will be provided by the developer.

Local contact – Courtney Kramlinger (507) 387-8711

Minneapolis – Malcolm Yards Affordable Housing

The city of Minneapolis is awarded $129,000 in Redevelopment Grant funds for demolition and public infrastructure improvements on this 2.37-acre site. Part of the larger Malcolm Yards Redevelopment Project with a long history of industrial uses, this site will be redeveloped into a six-story, 144-unit affordable apartment building. The project is anticipated to create three jobs, increase the tax base by $225,979, and leverage $32.6 million of private investment. Matching funds will be provided by tax increment financing and the developer.

Local contact – Kevin Carroll (612) 673-5181

St. Paul – Farwell Yards

The city of St. Paul is awarded $898,750 in Redevelopment Grant funds for demolition, public infrastructure improvements, and geotechnical soil correction on this 3.89-acre site. Historically used by a lumber yard, paint and varnish plant, trash hauler, construction crane contractor, and a trucking company; this site will be redeveloped into a five-story, 210-unit apartment building with 3,000 square feet of retail space. The project is anticipated to create 10 jobs, increase the tax base by $638,993, and leverage $64 million of private investment. Matching funds will be provided by the developer.

Local contact – Andrew Hestness (651) 266-6577

Demolition Loan Program:

In addition, Minn. Stat. § 116J.571 gives DEED the authority to award loans under the Demolition Loan Program. This program runs at the same time and funds are awarded from the same account as the Redevelopment Grant Program. The Demolition Loan Program assists communities with the removal of dilapidated, unsafe structures to prepare the site for a future, unnamed development. This round, DEED awarded one Demolition Loan to the city of Darfur, in the amount of $30,000. To date, 12 Demolition Loans have been awarded totaling over $2.3 million in loan awards and reclaiming nearly 39 acres of blighted property.

Darfur – Darfur Feed Mill

The city of Darfur is awarded $30,000 in Demolition Loan funds for this 0.53-acre site. Formerly a feed mill, the site has the redevelopment potential for commercial or retail developments. Darfur plans to issue a general obligation bond to secure the loan.

DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and its services, visit the DEED website or follow us on Twitter.