Spring Valley economic development director Cathy Enerson received word at the end of last month that two components of her plan for downtown revitalization are moving ahead.

The application for small cities block grant funds from the Minnesota Department of Employment and Economic Development (DEED) was one of 33 proposals out of 83 submitted that will be considered for funding in 2013. It is anticipated that about 25 projects with an estimated total of $14 million in grant funds will be awarded.

Staff of the Small Cities Development Program determined that the Spring Valley project would be competitive for the 2013 funding cycle. The 33 projects initially approved also include some marginally competitive projects.

"We would expect that proposals that receive a competitive label will submit a full application, but we caution that the label does not guarantee funding of a project," stated the letter announcing the determination.

Full applications are due Feb. 28 and the final awards will be announced after that review process is over.

If approved, Spring Valley could receive nearly half a million dollars for downtown development. A total of $300,000 is designated for commercial buildings and $175,000 for residential units above the commercial buildings.

The funds would be used for exterior improvements, such as painting, siding, tuckpointing, masonry repair, doors, windows, awnings, roof repair and signage, as well as items needed to correct health and safety code violations, such as faulty wiring, fire exits and handicapped accessibility.

A total of 70 percent of the project would be funded by a loan from the program, which would not require repayment if the building owner continues to own the building for seven years. The remaining 30 percent of the project would be funded by private financing.

Eighteen downtown business owners returned surveys for this project and 15 are proposed to be assisted in commercial improvements. Another eight building owners applied for assistance on improvements of 26 rental units.

Enerson also received notice that the Greater Minnesota Housing Finance Agency approved $77,000 in funding of a pilot program, contingent on the city getting the small cities block grant funding from DEED. The money would be used as seed money for a revolving loan fund to renovate apartments above commercial properties in downtown Spring Valley.

This is another part of the vitalization plan for downtown that Enerson has been working on with various community groups. The EDA is the organizing board working to develop economic tools for building owners to make improvements. The project will be done in conjunction with the small cities block grant program, allowing business owners to get low interest loans for their share of private financing.

The EDA recognizes that with collaboration, the city can create quality, safe, attractive apartments for low to moderate income residents, said Enerson in her application.

"In doing so, we will create apartments and buildings that are up to code and energy efficient, she noted in the application.

The EDA is hoping to create a pilot program with the GMHFA which would create a revolving loan fund for building owners to use at 1 percent interest, to be paid back over five years.

Earlier, the EDA created a special sub-fund of $35,000 within its revolving loan fund for improvements to the commercial portion of the buildings, also at 1 percent. Normally, its revolving loan fund process requires job creation and other economic measures, but this loan is strictly for downtown building improvements.

As an overall approach to revitalization of downtown, Enerson is using a four-point approach provided by Minnesota Main Street's historic preservation committee. The four points are: Organization, economic restructuring, design and promotion.

She is working on a design component with an architectural firm that is familiar with Spring Valley businesses and has worked with local contractors. The firm would work with local businesses to get input and then unveil a unified design for downtown.

She has contacted various agencies to get $6,600 in funding for the downtown design, which includes uncovering historic components of buildings and using affordable building materials to make dramatic improvements. It appears she is very close to reaching that goal so this step can begin soon.

"We are not done yet," said Enerson. "It is a process of collaboration and applications."