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Willmar to apply for Small Cities grant

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WILLMAR — If approved by the Minnesota Department of Employment and Economic Development, Willmar could have over $1 million available to help home and business owners fund needed rehab projects on their properties.

The target area for residential properties is north of Pacific Avenue Southwest to Park Avenue Northwest and from 17th Street Northwest to just east of Seventh Street Northwest. Businesses could be eligible for assistance in the commercial target area of Pacific Avenue Southwest to Trott Avenue Southwest and from First Street South to Seventh Street Southwest.

The city is applying for a total of $1,214,145 from the Small Cities Development Program, which will help fund an projects at an estimated 13 homes and 13 commercial businesses, plus a rehabilitation project at the Hanson Apartments and the Housing and Redevelopment Authority's administration costs.

The Small Cities Development Program awards cities with funds that can be administered as deferred loans to eligible properties. The monies can be used to help pay for window and door replacement, roof replacement, siding replacement, foundation repairs, repairs or replacements of electrical, plumbing or heating systems, insulation, handicap accessibility and corrections for building code violations.

The Willmar City Council on Nov. 6 approved the pre-application to the Minnesota Department of Employment and Economic Development after hearing from Jill Bengtson, executive director of the Kandiyohi County Housing and Redevelopment Authority. The pre-application was due Nov. 9. DEED will inform the city whether it may submit a final application by Dec. 14. The final application is due by Feb. 22 with program awards being announced in June 2018.

The program would provide deferred loans up to $25,000 for eligible residential properties within the target area. The city's application is requesting $286,000 for an estimated 13 homes.

The loans would cover 70 to 100 percent of the costs of the project. The funds a homeowner could receive, and how much the loan will cover, will depend on their income level.

If the homeowner continues to live in and own the property for 10 years after the rehab project is completed, the loan will not have to be repaid. However, if the homeowner sells the property or moves, the entire loan amount will have to be repaid.

Residents were made aware of the Small Cities program through three meetings and mailings.

"Everybody in the target area should have received a mailing from us, explaining the program," Bengtson said.

Those interested in the program were put on a waiting list. If Willmar is awarded the funds, Bengtson said the HRA will start at the top of the list, to see if the owners want to do a project.

"As of (Nov. 3), we had 23 households on the wait list," Bengtson said.

For the commercial properties, the Small Cities program awards deferred loans up to 60 percent of the rehab project costs, at a maximum of $40,000. The property owner has to provide at least 20 percent of the project costs. The Small Cities loan will be forgiven if the business owner does not sell or transfer the property for seven years.

Willmar's pre-application is requesting $253,837 for 13 commercial buildings.

Both the residential and business target areas encompass those properties which could be on the Willmar Municipal Utilities district heat program. The utilities and City Council voted to discontinue that service, and those properties will need new heating systems before the decommission date of July 1, 2020.

"I really appreciate the fact that those individuals, who are losing their district heat, have the opportunity to access this to work through it," Councilor Kathy Schwantes said.

The Small Cities program also will provide $600,000 in funding for the rehabilitation project at the 56-unit Hanson Apartments on Lakeland Drive Southeast. The purpose of the project is to retain the affordable housing that the apartment complex provides to the Willmar community.

The money, in a 30-year, zero percent deferred loan, will assist the Southwest Minnesota Housing Partnership in acquiring and rehabbing the property.

The last time Willmar participated in the Small Cities program it received $1,048,702. Those funds assisted nearly 40 properties.

"It was for 27 homeowners, two rentals, nine businesses and Highland Apartments," Bengtson said.

The City Council unanimously approved Bengtson submitting the pre-application, believing the program, and the projects that it would help fund, would be a benefit to the community.

"I think this is an exciting project," Schwantes said.