At the June 12 Spring Valley Economic Development Authority meeting, economic development director Cathy Enerson discussed the $539,750 Spring Valley will receive through the Small Cities Development Program.

"This is exciting news,'" exclaimed Enerson. The EDA, with the assistance of administrator Michelle Vrieze, have been working to get approval for this grant as part of an overall downtown development project.

Grants totaling $17.97 million were awarded to 32 communities in Greater Minnesota to help pay for rehabilitating housing and commercial structures and improving infrastructure. The Minnesota Department of Employment and Economic Development (DEED) awarded the funding under its Small Cities Development Program, a federally-funded initiative that seeks to benefit people of low and moderate incomes.

The Small Cities Development Program makes grants available to cities and townships with populations under 50,000 and counties with populations under 200,000.

Spring Valley will receive $539,750 through this grant for the revitalization of the downtown area. This includes rental and commercial properties within the downtown area, which is considered the two blocks of Broadway Avenue.

The only properties that cannot be included in the grant are any in the flood plain, but these buildings are still eligible for the Spring Valley revolving loan funds.

Fifteen commercial properties and fourteen rental properties have applied for the grant, which will be handled on a first come, first served basis. Each commercial property can use up to $28,000 and each rental unit is eligible for up to $18,000.

Many of these owners have been working with Urban Studio, a Rochester-based company, which has held a series of public meetings for community members and local business owners to get ideas and suggestions on planning and creating a unified vision for downtown Spring Valley.

The block grant is the centerpiece for the overall downtown project.

The city will also be a pilot program for Greater Minnesota Housing and will receive $77,000 to start a revolving loan fund to assist with the owners contribution toward the revitalization of rental units using the block grant funds.

Under this program, 2 percent revolving loan funds can be used as down payment funding for the loan portion of the small cities block grant funding with a maximum of $5,500 per apartment.

In addition, the EDA is offering 1 percent revolving loan funds for downpayment funding to assist with up to $10,000 toward the commercial projects through the small cities block grant. This is a special revolving loan fund of the EDA in addition to its usual revolving loan funds that are available for commercial expansion and new businesses.

Building owners applying for Spring Valley revolving loan funds will need to continue to put 15 percent of their own capital into the total project.

The city council and the city attorney still need to review and accept the small cities block grant, but this is expected to happen by the next council meeting, which is June 24.

In other business, the EDA discussed ideas for using the sales tax distribution from the Rochester sales tax. Spring Valley was targeted to have $265,423 available for economic development over the next two years when the state Legislature in 2012 approved Rochester's sales tax extension request with the condition that $5 million of the sales tax proceeds go to 17 area cities for economic development purposes. However, the distribution was contingent on approval by the Rochester City Council, which was scheduled to decide the issue Monday night after the Tribune went to press.

A hearing was set up to consider ideas for use of the money, but no visitors showed up with ideas. The board expressed thoughts on different ways to use the funds, including a project favored by the city council to expand the industrial park. The city is seeking a large grant for the industrial park that would require local matching funds.

Although Enerson supported that project, she also proposed some other ideas that would use a small part of the funding proposed.

Enerson wants the board to look into getting demolition funding, as it is very hard to find money for this, but is necessary for properties that would cost too much to renovate. Her feeling is that if they can set aside as much as $50,000 to be used in demolition projects for properties within a one-block radius of the downtown area it would be more cost effective for prospective buyers and current owners to demolish older buildings that are too costly to renovate.

Another proposed idea to encourage the development of lodging, such as bed and breakfasts, was considered. Enerson added she would like to see funding for a project that would, "create something more unique and different and attractive to tourists."

The board agrees they would like to see the money used in a different way for the good and preservation of the community. These proposals will be brought up to the city council at its next meeting.

In another matter, the board discussed taking over the $200 cost of the Minnesota Main Street Associates membership, which is part of the University of Minnesota Preservation Alliance. The Spring Valley Chamber of Commerce paid the fee for 2012, but since the membership is used mainly by Enerson for EDA-related business the chamber asked the EDA to take over the fee going forward.

Enerson explained how she utilizes the program's four-point approach of design, economic restructuring, promotion and organization when working on area projects. She asked that the membership be continued for at least two more years.

While the board agreed, they will be asking the chamber to split the cost as they benefit from it, as well, and the EDA's budget will only allow it to spend $100 more on fees for the year.

Enerson went on to explain the next order of business, the Recycling Local Income Project. This is a joint project with the Spring Valley Chamber of Commerce, which will start in July. The idea is that two $50 "bills" of Spring Valley bucks will be used at different businesses. From there, those businesses will circulate the bucks by using them at another local business, and so on.

"The purpose is to walk the talk, so the businesses can demonstrate buying local with each other," explained Enerson.

The next EDA meeting will be Wednesday, July 10, at 8:30 am.