How 6 Cities Are Funding Infrastructure for Economic Development

Is your Minnesota community looking to stimulate economic development, but short on resources?

The Greater Minnesota Business Development Public Infrastructure (BDPI) Grant, offered from the Minnesota Department of Employment and Economic Development (DEED), is an excellent funding option.

Whether you need to expand an existing industrial park, create a new one, or provide infrastructure improvements to assist in business retention, expansion or new location, the BDPI program can help. The program provides grants to Greater Minnesota communities to help pay for up to 50% of capital costs of the public infrastructure necessary to do so.

The BDPI grant can be used for public infrastructure that supports economic development projects. Projects include:

  • Wastewater collection and treatment
  • Drinking water
  • Storm sewers
  • Utility extensions
  • Streets

Only cities outside of the seven-county metropolitan statistical area are eligible to apply. The project must benefit a business in one of the following sectors:

  • Manufacturing
  • Technology
  • Warehousing and distribution
  • Research and development
  • Agricultural processing
  • Industrial park development

Retail developments and office space development, other than incidental office space, are not eligible for this grant.

BDPI Funding Success Stories

What can the BDPI grant do in reality? At SEH, we’ve helped a number of communities get the grant money they needed to make improvements supporting their economic development efforts. Here, we share a few of their project success stories and the funding formulas that made the projects possible.

$255,000 to accommodate the largest employer in town

Who: City of Pelican Rapids, Minnesota

Why: To accommodate the growth of the City’s largest employer, a major turkey processing plant. The plant's operations are dependent on exceptionally clean City water containing no contaminants. While safe for drinking, the City water contained high levels of secondary contaminants.

What: Upgrades to the City’s water treatment plant were necessary to retain the turkey processing plant. The improvements removed the secondary contaminants.

Formula for Success: The water treatment plant improvements totaled just under $900,000. In addition to the $255,000 BDPI grant, the City secured a low-interest loan from the Public Facilities Authority for the remaining $645,000.

RELATED CONTENT: 16 INSPIRING EXAMPLES OF COMMUNITIES CAPITALIZING ON CDBG FUNDING

$250,000 to add six lots to an industrial park

Who: City of Hanover, Minnesota

Why: The City of Hanover had no available industrial lots for sale; their industrial park was full.

What: The City turned to the BDPI program to assist with the streets, sewer and water necessary to expand the existing industrial park to open up six more industrial lots.

Formula for Success: Securing a grant for half of the capital costs of the infrastructure was critical to the City expanding their industrial park. They were able to complete a $650,000 infrastructure project and due to the grant, only needed to bond for $400,000.

$250,000 to improve industrial park infrastructure

Who: City of Chisholm, Minnesota

Why: To accommodate the expansion of a local lubricant manufacturer and other existing industrial park tenants. Repairs are needed on a road serving as a vital alternate route to the industrial/business park. The undersized water and sewer lines beneath the road have large amounts of inflow and infiltration, burdening the City’s operation and maintenance funds. Beyond that, the infrastructure doesn’t provide necessary volumes or capacities to accommodate the tenants at the industrial park.

What: To serve the tenants, the City is planning a total street reconstruction as well as replacing and upgrading water mains, sanitary sewer lines and storm sewers.

Formula for Success: The cost for completing the improvements was $1.1 million. The City received a $250,000 grant from a regional state development agency, the Iron Range Resources and Rehabilitation Board (IRRRB) and $100,000 from Community Development Block Grant funding. It is providing $200,000 in City funds and an additional $250,000 in Municipal State Aid dollars.

$240,000 to extend municipal water service to a business park

Who: City of LaPrairie, Minnesota

Why: Businesses in a business park are currently served by private wells not sufficient for the businesses to expand. The wells neither provide enough capacity for business expansion nor produce enough water to ensure proper fire protection.

What: Extend municipal water service into the business park.

Formula for Success: The total project cost is estimated at $605,000. After the grant money was approved, the City was awarded an additional $250,000 grant from the IRRRB. The City will be responsible for all gap funds needed to complete this project.

RELATED CONTENT: HOW TO DEVELOP A STRATEGIC ECONOMIC DEVELOPMENT PLAN

$250,000 to expand infrastructure for a new business

Who: City of Virginia, Minnesota

Why: To extend municipal infrastructure and site development to serve a contractor business coming to their community.

What: Infrastructure will include water, sewer, gas, power and access road as well as site development and site preparation costs. The business will construct a 40,000-square-foot facility.

Formula for Success: Total cost of this project: $1.8 million. The City will leverage the $250,000 BDPI award with $350,000 in City funds, $350,000 in IRRRB funds. The balance of the project funded privately by the business.

$60,000 for more jobs

Who: City of Rockville, Minnesota

Why: To help a local dairy business build a new facility and offer more employment opportunities. The new 15,000 square-foot facility allows the company to expand operations in the City's industrial park.

What: Adequate sewer and water service is available to the parcel; however, change in use triggered additional sampling requirements by the entity that treats Rockville’s wastewater.

Formula for Success: Estimated total cost of infrastructure improvements: $120,000. To pay for it, the City will leverage the $60,000 BDPI award with $60,000 in City dollars.

$500,000 to accommodate an international company

Who: City of Virginia, Minnesota

Why: To extend infrastructure to a 20-acre site that will accommodate needs of an international industrial equipment supplier planning to construct a 70,000-square-foot building, add 16 new jobs and retain 105 more jobs in the region. The facility will streamline operations and ensure that high paying skilled jobs will be created and retained.

What: Expansions to the municipal water, sewer and gas utilities that in turn allow the private company to expand.

Formula for Success: The project is being paid for with $1.2 million in grants committed by the IRRB, an $850,000 grant from the Federal Economic Development Authority, and $1 million in City funds.

Can a project in your Minnesota community attract and retain jobs with the help of a BDPI grant? Contact Heidi Peper

About the Expert

Heidi Peper

Heidi Peper works with communities throughout Minnesota to coordinate affordable financing packages, including grants, low-interest loans and other financial incentive programs for important projects. During her time at SEH, Heidi has secured more than $119 million in grants and low-interest loans, bringing clients’ projects from concept to construction. Contact Heidi

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