IQ Magazine—October 2022

Revitalizing Main Street

Special funding helps 6 Central Minnesota communities revive downtown corridors

By Kevin Allenspach | Photography by John Linn

For the people of Central Minnesota, there wasn’t a wave of civil unrest and property damage like there was in Minneapolis and St. Paul following the 2020 murder of George Floyd. But that doesn’t mean places as large as St. Cloud or as small as Pine River haven’t experienced upheaval during the past two years. It’s just been a by-product of a different stressor—the COVID-19 pandemic.

To address the upheaval in the Twin Cities and to offer relief to outstate communities reeling from a public health emergency that continues to linger, the Minnesota Department of Employment and Economic Development has distributed $80 million via the Minnesota Main Street Economic Revitalization Program. The money was awarded in two rounds of funding, one in which almost $30 million went to the Twin Cities metropolitan area in 2021, and another round of awards this year when more than half the money was earmarked for projects from Faribault to Park Rapids and Winona to East Grand Forks.

Of 14 organizational partners helping to allocate funds across the state, the Initiative Foundation is serving as the lone Central Minnesota intermediary, awarding $4.5 million among

six downtown corridors: Brainerd, Cold Spring, Little Falls, Long Prairie, Pine River and St. Cloud.

Via matching requirements that have no tie to state or federal relief, an award of $632,130 will leverage almost $2.1 million in investment for Little Falls, where Jon Radermacher has been city administrator for seven years. Potential recipients of the DEED money went through a competitive, open and inclusive process in late summer, with the Initiative Foundation finalizing the awards this fall. “We have a strong history of doing projects in our downtown,” said Radermacher, who grew up in rural western Minnesota and previously worked for the city of Madison, Minn. “Our approach is that the economics of our community and the valuation of properties do not lend themselves well to redevelopment on the private market. The analogy that I use is that you can buy a building in downtown Little Falls for $100,000, you can stick $100,000 into it and, in the end, you’re going to have a building that’s valued at $100,000. You take that investment model to a bank and they’re going to laugh at you.

“We said we’ve either got to get a bunch of altruistic people who are going to throw a lot of money into our downtown ... or we have to do something about it.”

DEED’s program provides for 30 percent matching grants and guaranteed loans for redevelopment needs that have arisen since

THE BIG PICTURE: Susy Prosapio, new owner of The Falls Theatre, and city administrator Jon Radermacher look forward to restoring the downtown Little Falls theater to its original grandeur.

March 2020. Businesses must have or secure the other 70 percent of funding. The Initiative Foundation worked with the six communities (and had more than a half-dozen more that weren’t able to meet a sharp turnaround from the request for proposals) to identify corridors that had COVID impacts on travel, tourism, retail and accommodation, and significant commercial vacancy increases. But not every business within those corridors had to show COVID impact. That broadened potential uses for the funding, which is designated for demolition and site preparation, engineering and design, repair, renovation and construction. All projects must be completed within a 36-month window that will close in July 2025.

Little Falls’ best examples of need may be within a block of each other along First Street Southeast. At the corner of Broadway Avenue sits the Butler Block Building, erected in 1891. Most recently it was home to U.S. Bank. Just down the sidewalk is The Falls Theatre (formerly Falls Cinema), built in 1933.

“U.S. Bank closed that branch at the start of the pandemic,” Radermacher said. “Then in the summer of 2020, they made a corporate decision to close or sell all their smaller main street locations. We had a developer who came in and bought the building last year. He didn’t have an end use in mind and got it for a song, but it’s going to take a lot of work.”

Bricks have literally been falling off the building, creating a safety hazard. The city of Little Falls provided a redevelopment loan last February to address that, but there will be more phases to the project. “It’s a really cool building and, as far as interior condition, one of the better ones in town,” Radermacher said. “But the second floor only has stairway access, no ADA accessibility, and it got chopped up when they brought in HVAC systems in the early ’90s.” As for The Falls Theatre, it closed at the onset of the pandemic and is now under new ownership. A new roof and other repairs are needed, making it an attractive property to be supported by Main Street Economic Revitalization funding, said Don Hickman, Initiative Foundation vice president for community and workforce development. “We’re trying to create an ambiance of vitality, so other people want to invest, too.”

If Little Falls can revive the bank building and theater, odds are it will drive other investment downtown, raise the tax base and create jobs.

“I’m thrilled by the range of creative and dynamic development proposals we got from main streets across the state,” DEED Commissioner Steve Grove said. “These investments will help rebuild business clusters hit hardest by the challenge of the last few

years – and they’ll create jobs and spark economic revitalization throughout Minnesota.”

In places like Little Falls, funding from the Minnesota Main Street Economic Revitalization Program might be the only way to bring effective change to historic small downtowns.

“You need to get the buildings to a point where they are marketable as a redevelopment opportunity, and you don’t always know what the end use will be,” Radermacher said. “This could be a good test case for DEED to see how this works and put a little trust in our local institutions to say. ‘We know what we need. Give us the opportunity and we’ll prove to you we can get it done.’”

Maximizing

Main Street Opportunities

The following cities join Little Falls in receiving Main Street Economic Revitalization funding through an Initiative Foundation partnership with the Minnesota Department of Employment and Economic Development:

BRAINERD ($765,600) will support housing and child care priorities. The YMCA bought an adjacent building and plans to convert it into a child care center, and the Region 5 Development Commission wants to repurpose an old fire house into co-working space.

COLD SPRING ($505,750) wants to prioritize targeted populations—women, veterans, Black/Indigenous/people of color—to address a lack of child care.

LONG PRAIRIE ($493,000) is prioritizing affordable housing and child care. This award likely will combine building renovations with ground-level retail and affordable apartments on the upper levels. The effort also will pursue a new child care center with bilingual providers to help address a workforce bottleneck.

PINE RIVER ($423,500) hopes to attract a major tenant to a former retail building. If the space can be filled, it's expected to draw other retail business from a 30-mile radius. The city also could help make façade improvements or repurpose other empty buildings.

ST. CLOUD ($1.5 million) plans to revitalize the commercial district of St. Germain Street, from the Paramount Center for the Arts to East St. Cloud. This project includes Benton and Stearns counties and focuses on small businesses—especially those with underrepresented ownership.

• Northern Edge Decor, Pequot Lakes

• Backroad Meats, Milaca

• LBT Concrete, Royalton

• Minnesota T’s, Brainerd

• GroShed, Emily

• KM Liquidator, North Branch

• Holdingford Hardware

• Chevy’s Pit, St. Cloud

• Little Falls Bowling Center

• Rizzy’s on the Lake, LLC, Osakis

• Baby’s on Broadway, St. Cloud

• Northern Oaks Events, LLC, Sauk Rapids

• Señor Elote Y Mas, Melrose

• Selvin Merida, Staples

To learn more about the Initiative Foundation’s business financing program, or to see if your project is a fit, scan the QR code or visit ifound.org/economy/business-financing. Dan Bullert, senior business finance manager, and Doug Adams, business finance officer, stand ready to continue the Initiative Foundation’s legacy of lending to regional small businesses.