ELY- The city of Ely’s grant application for gap financing for its proposed 37-unit workforce housing project was flunked due to a requirement about which city officials were never informed.
Ely donated a $75,000 property — the site of the old city garage — to its housing authority as part of its own contribution to the project. After waiting six months to find out why the grant was turned down, state officials informed the city their application was denied because the city did not provide a full appraisal of the property.
At Tuesday’s Ely Economic Development Authority meeting, the city’s development consultant John Fedo gave the news.
“We were told that we were disqualified because we didn’t utilize the format of a full appraisal on the $75,000 for the property donated by the city to the project. We were not asked for that … if we had been told that (a full appraisal) was required of us, we wouldn’t have put a qualified number (based on the county’s appraised value).”
The Ely Housing and Redevelopment Authority submitted the $4.5 million grant application for gap financing on the $9.2 million project. The city was aiming at receiving a portion of the $39 million pot of grant fudning which state Rep. Roger Skraba and state Sen. Grant Hauschild helped push through the Legislature in 2023. The money was supposed to be used to support housing projects outside of the Twin Cities metropolitan area. When the money was awarded, most of the funding went to projects within a 60-mile radius of Minneapolis.
Ely was originally told by the Minnesota Housing and Financing Authority that the grant had excellent prospects of being funded. City officials are currently trying to set up a meeting with the agency to gain a fuller understanding of the grant denial and the city’s chances to obtain future funding.