MANKATO — The state of Minnesota, already in for $2.2 million, added nearly $1 million more for the South Front Street redevelopment project Wednesday.
The Minnesota Department of Employment and Economic Development announced it was awarding a $935,100 grant from the Contamination Cleanup Grant Program for the South Front Street redevelopment.
The project, which so far has sailed through the city approval process, will bring a seven-story office tower, a four-story commercial/residential building and a parking ramp to the block surrounded by Riverfront Drive and Front, Cherry and Warren streets. The total cost of the project was estimated at $15 million to $16 million, including the new parking ramp funded largely by the city with assistance from state grants.
DEED had already awarded the project a $2.2 million redevelopment grant earlier this year.
The need for pollution clean-up of the site — home to a rail yard and foundry in the city’s distant past — was discovered when soil borings were done by the Tailwind Group, the project’s developer. Mankato Community Development Director Paul Vogel expects the developer and the city will benefit roughly equally from the latest grant.
With $200,000 already slated for soil corrections in the $4.9 million budget for parking improvements, Vogel said the clean-up grant makes it likely the cost of removing and disposing of contaminated soil under the ramp won’t drive up the project cost.
“It should come very close to covering the city share,” he said.
While Minneapolis and other cities in the metro area routinely see DEED pollution clean-up grants of $1 million or more, only Moorhead and Duluth among outstate cities have received grants from the program topping Mankato’s $935,000 grant in the past 10 years. Mankato’s only previous grant was for $19,000 in 1999 for a clean-up at Mankato Plating.
The size of this grant doesn’t mean that the Front Street site is particularly toxic, Vogel said.
“It’s nothing that represents a public health hazard,” he said, characterizing the pollutants as metal shavings and some oil residue.
The size of the grant has more to do with the city, which has added a staff member familiar with the grant program, becoming more aggressive in seeking the funds.
DEED officials had indicated the grant was likely to be awarded, although it was nearly $400,000 below the total estimated clean-up cost of $1.3 million. Tailwind will be responsible for paying clean-up expenses not covered by the grant for the portion of the contaminated soil under the two new buildings.
“This funding is a good public investment in a project that will create jobs and boost the local tax base by more than $174,000,” said DEED Commissioner Katie Clark Sieben in a statement released by the department Wednesday.
Final city approval of the project, the largest downtown development since the civic center was constructed nearly 20 years ago, is expected in about a month.