NEW ULM — The New Ulm Economic Development Authority (EDA) allocated money to replenish funds in four programs at its meeting Tuesday.

The programs include the Homebuyer Assistance Loan program, Single Family Rehab program, Multi-family Rental Rehab and Small Business incentive Grant program.

The EDA approved the allocation to the Homebuyer Assistance Loan program first. This program was approved in 2019. The program provides loans to first-time homebuyers. Each year the EDA allocates $50,000 to the program.

Four loans were funded in 2021 for $28,800. One loan was repaid in full due to the sale of the home for $5,500. As a result, the EDA needs to allocate $23,300 to bring the available balance back to $50,000 for loans in 2022. The average loan in 2021 was $7,200.

The Homebuyer Assistance program was designed as a revolving loan program, but funds will need to be allocated until it becomes self-funding. There is a five-year deferment on the loan. It will be five to ten years until it is self-funded.

Second, the board allocated funds to the Get It Ready Single Family Rehab program. The EDA approved the program in 2021 and allocated $120,000 to provide home improvement loans.

Four loans were funded in 2021 for $92,565. One loan was repaid in full due to the sale of the home for $14,464.35. Payments have been made on other loans.

The EDA needed to allocate $76,668.76 to bring the balance back to $120,000. The average loan given in 2021 was a little over $23,000. This program is also designed as a revolving loan fund. Annual allocations will be needed until it becomes self-funding.

The Multi-Family Rental Rehab loan was approved by the EDA in 2021. The board allocated $150,000 to provide rehab loans to rental property owners. Two loans were funded during 2021 for $96,716. One loan application was received and is pending for $50,000.

The EDA agreed to allocate an additional $142,756.30 to bring the available balance back to $150,000 for loans in 2022. The average loan received in 2021 was just under $49,000.

EDA Chair Daniel Braam said the Multi-Family was popular. He asked if maybe the program should be expanded beyond $150,000.

City Manager Chris Dalton said the current allocation is suitable but said it was a question of whether the EDA was going to assist with a program or fund it.

He believed $150,000 was adequate for funding at this time, but it might be necessary to increase it later depending on the need.

Braam agreed the EDA was not intended to be the sole source of funding. He suggested monitoring the program to see if a waiting list for the loan develops. There were also questions of whether the program could be modified to allow rehabs on single rental properties.

Dalton said one option was limiting the single-unit rehab program to downtown units. He suggested reviewing this option after the upcoming housing study.

The last program, the Small Business Incentive Grant was allocated $50,000. Since this is a grant program, no payments are made. The EDA approved it in 2019 for $50,000. It is designed to support new small businesses in New Ulm with start-up expenses during their first year of operation. The grant reimburses owners for eligible expenses up to $10,000 per business. All five grants were funded during 2021.

Housing Coordinator Heather Bregel said she already has two applications for 2022 for this grant. This means two new businesses are supported.

The board asked if this grant program should be expanded as well. The EDA had sufficient fund balance to put more money into the grant program. Bregel said all of the businesses that took advantage of the grant are still in business. The program currently has a 100% success rate.

The board decided to keep the allocation at $50,000 for now.

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The EDA approved a $10,000 stipend for Housing Coordinator Heather Bregel to perform economic development duties.

In 2021, Bregel took over economic development duties during the Economic Development Director’s extended leave of absence. With the elimination of the Economic Development Director position, City Manager Chris Dalton asked to make the Housing Coordinator the single point of contact for Economic Development activities for the City of New Ulm.

With these increased roles and duties, Dalton believed it was appropriate to give her an annual stipend. In addition, the EDA is seeking a part-time assistant position for Bregel, to allow her to focus on Economic Development activities.

In the past, the EDA contributed $33,000 to the Economic Development position. This would be less than a third of the previous payment. The $10,000 stipend would be an annual payment.

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The board awarded the latest comprehensive community housing study to Maxfield Research & Consulting for $20,250.

Maxfield Research prepared a housing study for the EDA in 2005. Community Partners Researched prepared the Housing Studies for the EDA in 2012 and 2017, but was unable to submit a bid this year due to the current workload.

Housing Coordinator Heather Bregel said staff believed using Maxfield Research could give the EDA a different point of view.

Bregel said it typically takes six months to complete a housing study, but because of the 2020 census, many communities are updating housing studies. This has increased the workload for consulting groups. The 2020 census data was released late meaning all consulting groups are behind schedule. Bregel estimated the result would be available in the fall.