Pine City to seek grant funding for Hillside Court Apartments foundation repair project

The Pine City Council voted to move forward with applying for grant funding for a Housing & Redevelopment Authority project to rehabilitate the Hillside Court Apartments property at last week's meeting.

"As you're well aware, that property, Hillside Court, has some foundation issues," said economic development coordinator Lezlie Sauter.

Sauter explained that the HRA was notified that it was not awarded grant funding through the Publicly Owned Housing Program at the end of September.

"This is one of the few opportunities left that could assist in making that repair," Sauter said.

The Small Cities Development Program — operated by the Minnesota Department of Employment and Economic Development — would grant a maximum of $12,500 per unit for multi-family rental rehabilitation.

"It's a competitive application process where communities like Pine City and our surrounding neighbors can apply for these funds to do a variety of types of activities, and that typically includes commercial building rehab," Sauter explained.

Because Hillside Court Apartments has 34 units, the maximum total Pine City's HRA could receive through the program is $488,750.

Pine City would be required to be the fiscal sponsor for the grant, because DEED doesn't recognize housing redevelopment authorities as local units of government.

"That's kind of what the ask is," Sauter said. "To be a collaborative partner for this project, and help them get the funds to fix the foundation."

The total estimated project cost is $861,550. The HRA has $372,800 in capital funds to match and complete the site work.

At a meeting to pass the city's preliminary budget in September, the council unanimously voted to approve the HRA's preliminary budget with the condition that Pine City separates all ties with the authority by the end of 2026.

Council member Kyle Palmer raised concerns about how the funding would work long-term if the HRA was no longer part of the city.

"The HRA was created by resolution by the city council back in 1966," Sauter said. "Cities can dissolve their HRAs, but if there's a property that is being managed by that HRA, then it needs to transfer to another entity that can do that kind of work."

Sauter explained that transferring a property to another entity would require fixing all of its capital needs, including the foundation.

"It would be in the best interest of the community to keep it as it is, so you can get the foundation fixed, so that it could transfer to another entity in the future, if that is the wish of the council," Sauter said.

The vote to apply for SCDP funding on behalf of the HRA passed 3-1, with mayor Kent Bombard and council members Gina Pettie and Dan Swanson voting yes, and Palmer voting no. Council member Dave Hill was absent from the meeting.