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If at first you don’t succeed...
That seems to be the motto for Ely city officials, who hope that 2025 brings more luck when it comes to securing state funding for a 37-unit, $9.2 million market rate housing project.
Hopes for that project were devastated in September, when the Minnesota Housing Finance Authority doled out over $39 million for projects across the state, but Ely’s application for $4.5 million was not included.
“We still can’t get answers as to why we didn’t make the cut,” said John Fedo, the city’s economic developer.
State funding was needed to move the project forward, and local leaders say more housing is needed to attract and retain jobs.
“We’ve heard it from all the businesses and the hospital, especially,” said clerk-treasurer Harold Langowski. “They’re having a hard time recruiting staff because of a lack of appropriate housing.”
State Rep. Rogers Skraba called the housing dilemma “our Achilles...this is our problem.”
“There’s not a community in northern Minnesota, north of Duluth to the North Dakota border, every one of them is like ‘housing, housing,’” said Skraba.
Skraba and State Sen. Grant Hauschild (D) were hoping that an additional $39 million allocation to MHFA would jumpstart housing projects across rural Minnesota, but Ely officials say much of the funding allocated went to projects within a 60-mile radius of the Twin Cities.
At the Dec. 16 Ely Area Joint Powers Board legislative meeting, Langowski asked the legislators to additional money into the rural housing initiative.
“We are unsure of the future of the program,” said Langwowski. “If (funding for the program) it goes back to $2 million a year, our project and others in northeastern Minnesota stand very little chance to be funded.”
Hauschild sympathized with Ely leaders and voiced his own disappointment that the local project was shut out.
“I’m pretty mad about it,” said Hauschild. “I authored $39 million and $10 million goes to Grand Rapids and I get $1 million in my district (for a project in Grand Marais), and Ely gets the short end and Silver Bay gets the short end.”
Hauschild conceded that one of the obstacles may be differing opinions of what defines “greater Minnesota.”
“Where do you define those lines?” he said. “You’re going to get a huge group of legislators that freak out and say ‘we’re greater Minnesota.’ So where’s the cutoff? Is it Albertville? Is it Hinckley?”
For much of the year, Ely officials were optimistic that their project would receive state funding.
Dubbed “Wilderness Escape,” the Ely project calls for a 37-unit, three-story, market- rate workforce housing project near Ely-Bloomenson Community Hospital.
The city, through its housing and redevelopment authority, is working with private development company D.W. Jones, Inc., which has completed numerous housing projects across the state.
Once the project is completed, the apartment building will be owned by the Ely HRA.
Plans call for a mix of studio, one-bedroom, two bedroom and three-bedroom units, ranging from as little as 447 square feet of living space to better than 1,200 square feet.
The city got $850,000 in Iron Range Resources and Rehabilitation Board funds for the project, but the MHFA money was identified as a key and final piece of the puzzle.
“We were told we were either at the top or within one of the top of the competitive numbers,” said Fedo.
Langowski added that “we just want to see how our project scored and what we need to improve upon in our next application.”
Hauschild said he would introduce legislation to provide more funding, and Skraba is part of a housing committee in the State House.
City officials say they “have a great project,” but need additional help to get it to the construction phase.
“Anybody who deals with lending knows loan-to-value,” said Fedo. “When you build a project in northern Minnesota, when a project is completed it’s worth that much more in the Twin Cities. We’re always trailing the parade for a lack of a better description, and the IRRRB can’t finance the whole thing.”
