The city of Albert Lea is coming closer to applying for grant funds to improve the downtown district.

A meeting was held last month to gauge the interest of downtown landowners in financial packages needed to participate in the Minnesota Department of Employment and Economic Development’s Small Cities Development Program.

The city is now asking the landowners to sign up for the program so it can submit the preliminary proposal.

Jon Ford, executive director of the Albert Lea Housing and Redevelopment Authority, and Assistant City Manager Jerry Gabrielatos began visiting businesses along Clark Street last Friday, providing information to building owners about the program. Those interested in the funding must complete a letter of intent, which was scheduled to be mailed, along with additional information, to downtown property owners this week.

The program would provide loans for property owners in the downtown area to make improvements to their commercial buildings and rental properties.

“The community has gone through the process of determining that preserving the downtown district was important,” said Albert Lea City Planner Molly Patterson-Lundgren. “The city and community have continued to reinvest in that area and it makes sense to continue to do that.”

Patterson-Lundgren said having a strong downtown district is key to preserving the historic core of the community.

The city is planning to compile the letters as part of a preliminary proposal that has to be submitted to DEED in November. Final applications are due in February. Notification of approval will be in spring 2016. The earliest the first rehabilitation project could begin is during the late summer of 2016, according to Adams. The program is expected to run a total of 30 months, starting July 1, 2016, and lasting through Dec. 31, 2018.

The city plans on requesting a grant that would provide the following financing package to properties within the district for commercial projects: for every $100, $20 would have to be paid up-front by the property owner, $40 would be forgiven after five years and $40 would be available through a low-interest loan.

The city also has a plan to request a grant for residential rental projects.

“The Small Cities grant is an ideal opportunity for property owners to improve their commercial space and enhance the rental stock available downtown,” said Chad Adams, Albert Lea city manager.

Under the program, the city can apply for a maximum of $1.4 million in grant money. The maximum amount for one commercial building is $40,000. The grant isn’t expected to cost Albert Lea residents any money. A limited amount of grants are available, so the city is looking at putting together a competitive request for the grant.

Albert Lea’s downtown commercial historic district, north of Main Street and south of Water Street, is expected to be the target area for the program if it’s approved.

The grant is meant to help cities and counties with funding for housing, public infrastructure and commercial rehabilitation projects.

All Small Cities Development Program  projects must either:

• Benefit people of low and moderate income

• Eliminate slum and blight conditions and/or

• Eliminate an urgent threat to public health and safety.

The comprehensive Small Cities project is expected to provide funding for two main parts, including economic development activity and housing.

Examples of eligible improvements under the program include:

• Exterior repairs and improvements (windows, doors, signage and roofing)

• Code violation corrections (handrails, exit signs, health and safety issues)

• Handicapped accessibility conversions

• Energy improvements (heating system upgrades and insulation)

Under the program, housing may include partially forgivable loans that are available for the purpose of local housing rehabilitation. In all cases, housing funds must benefit low and moderate income people.

Money would be granted to the city from federal funds doled through the state of Minnesota. The city would then allocate the money to interested building owners in the downtown district as low-interest loans.