DEED Grants

We help with the cost of redeveloping blighted property in the city. This program is from the state's Department of Employment and Economic Development (DEED).

Overview of grant program

The Minnesota Department of Employment and Economic Development’s (DEED) Redevelopment Grant Program helps communities with the costs of redeveloping blighted industrial, residential, or commercial sites and putting land back into productive use. Grants pay up to half of eligible redevelopment costs for a qualifying site, with a 50% local match (typically paid by the owner or developer).

Grants can pay for:

• Demolition of an entire structure (partial/interior demolition is ineligible)
• Infrastructure improvements (e.g., water and sewer, standard sidewalks, standard exterior public lights, roads, etc.)
• Geotechnical soil stabilization when infill is required
• Ponding, stormwater handling or other environmental infrastructure
• Certain types of interior environmental abatement at sites where a subsequent redevelopment will occur

The next round of this DEED program will have a final application deadline of February 1, 2024.

Please note: the City’s Brownfield Grant Program has information about potential funding sources for environmental costs related to new development projects.

DEED will be providing about $2 million of grant funding in the February 1, 2024 grant round. Of that amount, 50% will be awarded to Greater Minnesota sites (if enough eligible applications are received); the remainder will be awarded to sites located in the seven-county Twin Cities metropolitan area. Funding is available for private sector projects that do not require new public infrastructure, along with projects that (a) will be constructed on publicly owned land and have a public purpose or (b) require new public infrastructure.

For more specific information, visit DEED’s Redevelopment Grant Program or call 651-259-7449.

For a property or project located within Minneapolis, the City must (in most cases) be the official applicant, and/or the City Council must approve a resolution in support of the application, in order for that application to be considered by DEED. However, the grant application must be prepared by the owner/developer that is seeking the funding. Any Minneapolis project that wishes to pursue funding from this DEED program must submit a pre-application to City staff by 12:00 noon on December 15, 2023. Please contact Kevin Carroll to request the required pre-application forms and materials.

City Council Policy Regarding Pass-Through Grant Assistance for Housing Projects

Any housing project that seeks the City’s assistance with regard to obtaining pass-through grant funding must comply with the affordability provisions of the City’s Unified Housing Policy (“the Policy”).This will require, for example, that at least 20% of the units in a residential rental project be affordable to (and occupied by) households earning 60% or less of the Area Median Income (AMI) for a period of not less than 30 years, unless a shorter affordability period is specifically approved (see the Policy for other potentially applicable affordability requirements).

The potential exceptions to the Policy’s affordability requirements have been amended by the City Council, effective June 23, 2023. There is one potential exception to the Policy’s affordability requirements. The City Council has the discretion to approve a waiver of the City's affordability requirements to facilitate a phase or building in a large development project that will meet the affordability requirements on a blended basis.

Any project that wishes to request a waiver must submit a letter to City staff requesting that waiver, accompanied by documentation supporting the project’s eligibility for said waiver. The letter and documentation must be submitted with your project’s pre-application(s) by the December 15, 2023 pre-application deadline. City staff will review the waiver request and recommend approval or denial to the City Council, which will then make the final decision regarding whether a waiver shall be granted.

Requirement for Housing Projects Seeking Affordable Housing Trust Funds or Housing Revenue Bonds

A project that intends to apply (or that has applied) for City Affordable Housing Trust Funds (AHTF) or Housing Revenue Bonds is not eligible to submit a City pre-application for DEED Redevelopment Grant Program funding until at least a portion of that funding has been secured.

The City of Minneapolis has a grant application processing fee. An application fee of $750 (payable to the City of Minneapolis) is due with your pre-application.

Please note that application fees are non-refundable, and will be retained regardless of whether an application (a) is ultimately submitted to DEED or (b) results in a grant award.

The City also has a grant award administration fee that is equal to 7% of the amount of any awarded grant. Grant and City funds may not be used to pay this fee. A lower fee (3%) will be applied to housing projects that comply with the City’s Affordable Housing Policy (20% or more of the housing units at or below 60% of the Area Median Income) and commercial/industrial projects located within areas designated as "eligible priority" by the Great Streets Neighborhood Business District Program. For projects in compliance with the City’s Affordable Housing Policy, the grant award administration fee is due at the time of closing with the project’s primary lender. For all other projects, the grant award administration fee is due when the Funding Agreement between the City and the developer is executed. Awarded grant funds are not available until the project is fully-funded and ready to begin construction.

If DEED’s Redevelopment Grant Program awards funds to the City on behalf of a project, the developer of that project will be required to enter into a subrecipient agreement with the City and comply with any applicable City requirements. These requirements vary depending upon the type of development and the source and amount of public investment.

They may include, without limitation:

• The payment of prevailing wages
• The preparation of affirmative action plans
• Competitive bidding
• Compliance with the Apprenticeship Training Policy and/or the Small and Underutilized Business Enterprise Program, the Business Subsidy Act/Living Wage Ordinance, and reporting requirements for any of the previously mentioned programs

All DEED Redevelopment grant agreements have project start date requirements. Any project that is awarded funding in the February 1, 2024 grant round will be required to commence the grant-funded work in time to be able to submit its first draw (reimbursement) request by June 30, 2025. Do not submit a pre-application to the City unless you are certain that your project will be able to satisfy that requirement.

Also note: If a project fails to substantially provide the public benefits stated in the application within five (5) years of the grant award date, the commissioner may require that 100% of the grant amount be repaid to DEED.

Sign up for the Development Notices & Requests for Proposals list to receive information for upcoming grant rounds of this program.