The Journal file photo In an effort to address the area's day care shortage, the EDA has purchased the vacant Upper Midwest Management building at 1314 Westridge Road to develop a pod system day care center, with the seller pledging $5,000 to the day care initiative.

NEW ULM– A purchase agreement has been made for the New Ulm Economic Development Authority to purchase the building at 1314 Westridge Road to create a community child care space.

The EDA submitted a purchase agreement last week and received a counteroffer. The EDA board met in closed session Monday to discuss the offer and agreed to purchase the building for $390,000.

Housing Coordinator Heather Bregel said including rehabilitation work, this project will cost the EDA around $500,000. Property sellers Jim and Greg Thomas of Upper Midwest Management have agreed to pledge $5,000 to the day care initiative. The EDA received a $30,000 grant for the rehabilitation of the building.

The plan is to operate a pod system day care, using the building as a common space for up to four home day care providers. Four day care providers would operate separate businesses but share the space and resources. The pod model is beneficial for home day care providers who want to run day care but do not have space or the resources in their own homes.

The pod system of day care is relatively new. Only six pod day cares operate in Minnesota. The EDA is hoping this pod day care will serve as a model for others.

The pod model is quicker to establish than a new day care center because day care centers are required to receive license approval from the state. The home/family day care licenses and the pod model only require county licensing. Day care centers have been struggling with staff recently.

The city has identified two providers who are willing to rent space for a child care business. Bregel said there will be an application and lease agreement developed for those interested in operating a day care from this location. The EDA will also work with a 501-C3 nonprofit to start a capital campaign for the building.

The goal is to have the building ready and operating as a pod system day care by early 2023.