New daycare 2 (copy) (copy)

Candice Deal-Bartell, shown in August in the early stages of transforming Main Street's Ridgely Building into a day care center, is receiving additional assistance from the city of Mankato to address unexpected costs.File photo

MANKATO — Candice Deal-Bartell, looking to create a desperately needed new day care center in downtown Mankato, recognized the potential in a 1926 building on the city's list of historic landmarks.

The plumbing deficiencies weren't so visible, however, until the gutting and renovation of the Ridgely Building was well underway. Those issues, plus upgrades needed when inspectors said a sprinkler system would be required, have pushed the renovation budget for the Cultivate Mankato day care from $252,000 to $425,000 and also pushed back the projected opening date to June 3.

"Some of this we didn't see until the walls were removed," Deal-Bartell told the Mankato City Council Monday night. "... So we're about a month delayed."

The council, acting as the city's Economic Development Authority, agreed to help fill the financing gap by boosting its previously approved City Center Renaissance Loan from $125,000 to $200,000. Private financing will cover the remainder of the additional renovation cost of the building at Main and Broad streets.

The amended loan agreement, which carries a 5 percent interest rate and an eight-year term, still fits within city guidelines for the loan program based on the amount of private equity involved in the day care, the 10-plus jobs that will be created, and the project's role in meeting a demonstrated shortage of child care slots, according to City Manager Pat Hentges.

It's likely that city staff would have recommended the entire $200,000 figure when the original loan was approved in August if Deal-Bartell had requested it, Hentges said.

Reusing an older downtown structure such as the Ridgely Building, originally built as a home for the Mankato Clinic, brings inevitable surprises, he said.

Much of that was prompted by the need for a sprinkler system, according to a memo to the EDA: "With the renovation underway, it was found that additional plumbing and HVAC work was necessary in order to install the fire suppression system, which was required by the State Fire Marshal."

The council thanked Deal-Bartell for taking on the major undertaking, which is expected to provide more than 100 day care slots from birth to age 5 initially with the potential for more later.

"This is a problem," Council member Mark Frost said of the waiting lists for child care. "I'm happy somebody's tackling it."

The shortage of day care slots in Mankato has been documented in several studies, and the scarcity is even more pronounced downtown. Hundreds of additional jobs are being added through the construction of several office buildings, including the seven-story Eide Bailly Building adjacent to Cultivate Mankato.

Deal-Bartell said she's seeing the demand already. More than three months before her projected opening, 105 of 119 slots are spoken for.

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