The Free Press, Mankato, MN

Local News

April 11, 2010

New status brings money, paperwork

North Mankato lands $96,000 housing grant

By Mark Fischenich Free Press Staff Writer

NORTH MANKATO — Becoming a “metropolitan statistical area” has meant two things so far for North Mankato: nearly $100,000 and a lot of paperwork.

The MSA designation for Mankato-North Mankato came when the cities, along with smaller adjoining towns, topped the 50,000-population threshold. The designation makes the cities automatically entitled to certain federal funding, including a 2010 Housing and Urban Development grant of $96,600 for North Mankato.

The city is planning to use it to create a some rental housing units downtown for low- and moderate-income residents. Specifically, the plan is to spur development on a couple of unused lots on the 200 block of Belgrade Avenue — the block that includes Mutch Hardware and the closed Happy Dan’s convenience store — by subsidizing the rental housing that would be on the second floor of the new businesses.

Like most Minnesota cities, North Mankato is struggling with state aid cuts that are forcing spending reductions and putting pressure on property taxes. But the federal funding isn’t something that can be applied to the city’s general fund budget.

“We can’t simply use this as we want,” City Planner Mike Fischer said this week of the federal appropriation. “There are restrictions.”

Along with providing low-cost housing, the funds are aimed at eliminating slums or blighted areas or addressing immediate concerns such as lead-based paint in residences.

“So we’d be in the rental business again?” Councilman Bill Schindle said of the plan to use the HUD funds for low-income rental housing.

“That would not be our expectation,” said City Administrator Wendell Sande. “But I cannot rule it out.”

The preference is for private development, with the cost of adding the rental units subsidized by the $96,600.

Although the city is now entitled to the money, is not required to provide a local match and will be receiving it on an annual basis, there is a cost. The federal regulations involved forced Fischer and an intern to fill out dozens of pages of documents and create a trio of hefty reports.

Schindle was surprised they weren’t larger.

“A federal document under 2,000 pages,” Schindle said. “Wow.”

Fischer responded with something between a smile and a grimace: “We’re not done with it yet.”

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