Along Minneapolis's Lake Street, developers anxious for rebuilding aid
(FOX 9) - Developers are anxious for the state of Minnesota to deliver long-awaited grants, their plans to rebuild from the 2020 riots on hold until the financing puzzle comes together.
A program approved by lawmakers this summer follows a two-step process. First, the state will give funding to foundations, which will then choose worthy local projects. Economic Development Commissioner Steve Grove said his agency was processing applications from foundations this week and would make an announcement soon.
"We're excited for that program," Grove said. "We're trying to move quickly with that one."
Local business coalitions expect $40 million to $45 million of grant money to land in the Twin Cities. The rest of the $80 million program is earmarked for revitalization projects in Greater Minnesota.
The process of rebuilding from the unrest has been slow. Crews are demolishing the fire-gutted Midway Shopping Center in St. Paul just this week, while numerous other lots sit vacant.
Yet the decision to tear a building down or rebuild it has often been the easiest part. Obtaining the necessary financing to rebuild has challenged many local developers, said Russ Adams, manager of corridor recovery initiatives at the Lake Street Council in Minneapolis.
"Financing the reconstruction is the biggest missing piece in the recovery," Adams said in an interview. "That’s why the DEED (Department of Economic Development) program is so important because it’s one of those pieces that helps these projects fill in the gap financing."
Adams pointed to the century-old Coliseum Building on the corner of 27th Avenue South and Lake Street. Intended for demolition, its new owners instead plan a $13 million renovation with a ground-floor Du Nord Craft Spirits taproom and a third-floor space for women-owned business startups.
The project, like several others along the corridor, is relying on a dozen or more financing sources including the state program, Adams said.
"A measure of the success of this program is can we get the money to the little folks – the mom-and-pop businesses, particularly from the BIPOC community – that suffered in some respects the worst of the damage in the civil unrest," he said.
The program is smaller than the $300 million Democratic lawmakers initially sought. Gov. Tim Walz pared the proposal back to $150 million in redevelopment bonds before negotiations with the Republican-controlled Senate brought the final sum to $80 million.
There will be competition for the funding. The Minneapolis Foundation alone applied for $20.8 million, said Sarah Lemagie, a spokeswoman.
Meanwhile, the St. Paul and Minnesota Foundation is waiting to see if it becomes a state partner before asking local property owners and developers to apply for funding, said Pahoua Yang Hoffman, senior vice president of community impact.