Main Street Economic Revitalization Program (MSERP)

Frequently Asked Questions (FAQ)

What is the Main Street Economic Revitalization Program (MSERP)

This is a state-funded initiative through the Department of Employment & Economic Development (DEED) intended to provide grants for capital improvement projects in commercial corridors across the state.

Projects resulting in the development, redevelopment, renovation, or repair of buildings are eligible for funding under this program.

Funding is available to anyone who has plans to invest in an eligible project per the requirements listed below. Priority will be given to business owners or developers from underserved populations including Black, indigenous, and people of color (BIPOC) individuals.

Who is administering the grant program locally?

Red Wing Downtown Main Street applied for and received $750,000 for strategic redevelopment in the historic downtown corridor.

What can a building owner receive as part of this grant program?

Building owners can receive a grant for up to 30% of the total project cost. Eligible expenses include:

• Repair, or renovation of real property

• Building construction

• Landscaping and streetscaping

• Demolition and site preparation

• Predesign and design

• Engineering

• Non-publicly owned infrastructure

• Related site amenities

The following expenses are ineligible:

• The purchase of real estate or business operations

• Business operating expenses such as inventory, wages, or working capital

When must projects be completed if they are awarded a grant?

Project work must be completed by June 1, 2026. All paperwork must be complete and submitted to DTMS by June 15, 2026. DTMS must finish reporting, etc., by June 30, 2026.

What considerations should be made about zoning, permitting, and review by the City of Red Wing and the State of Minnesota?

An applicant should check with the City of Red Wing for all permitting, zoning, and ordinance requirements.

All properties within the historic district will require review by both the local Historic Preservation Commission and the State Historic Preservation Office.

What is the maximum and minimum amount of funding that can be received under this program?

The maximum amount of funding available under this program is $150,000, which can be received by projects with a total cost of $450,000 or more.

The minimum amount of funding available under this program is $5,000, which can be received by projects with a total cost of $15,000 or more.

Prevailing Wage Requirement for projects

We do not anticipate awarding any projects where prevailing wages would be required. Should a project receive $200,000 or more, the applicant must follow the prevailing wage guidelines set by Minnesota State Statutes 177.41 through 177.44 and outlined by the Minnesota Department of Labor and Industry here: Prevailing-wage information | Minnesota Department of Labor and Industry (mn.gov).

Who is eligible to apply for this grant program?

Building owners or developers with property located in the historic downtown and who have plans to develop, redevelop, renovate, or make repairs to their property are eligible to apply. Projects that invest in preparation for a future project can apply to cover any of the eligible expenses listed above.

When can I apply for a grant under this program and when will funding be available?

We hope to open the grant application in May. We may have another application period in October of 2025 if all funds have not been utilized.

What are examples of eligible projects?

The following examples are provided to give you an idea of whether a project is eligible. Not all eligible projects will receive funding. Some types of projects that are not listed below may be eligible.

• Development:

  • Building a new structure on previously vacant land.

  • Adding additional space onto an existing structure.

  • Redevelopment:

  • Demolishing an existing structure and constructing something new

  • Repurposing an existing structure to find a new use

• Renovation

  • Making an improvement to a building façade (storefront)

  • Remodeling the interior of a building

  • Remodeling a doorway or building a ramp to improve ADA-compliant accessibility

• Repair

  • Repairing a leaking roof

  • Fixing broken windows or doors

  • Resolving a safety concern

  • Adding fire suppression/sprinklers

  • Replacing a damaged HVAC system

Who decides if my project will receive funding?

Downtown Main Street will partner with representatives from local economic development organizations to form an Advisory Committee. The Committee will make recommendations to the Downtown Main Street Board of Directors, who will make the final award(s).

Where can I receive help with my application?

Megan Tsui from Red Wing Downtown Main Street is the contact. She can be reached at (c)612-807-0804 or megan@downtownredwing.org.

What should I consider as I complete my application?

Grant applicants will be asked to show that their project accomplishes one or more of the following goals:

• The project will retain existing jobs and/or create new jobs

• The project will increase the property value of the structure or vacant site

• The project will positively impact the community & residents beyond indicated economic measures. Applicants will be asked to highlight any elements of their project that positively impact members of the underserved populations listed above:

  • Examples include but are not limited to:

    • Adding ADA accessibility

    • Providing access to culturally appropriate spaces

    • Improving community aesthetics & vitality

• The project will positively impact other businesses in the corridor

  • Examples include but are not limited to:

    • Project will be a supplier or customer of other businesses

    • Project will increase traffic to surrounding businesses

    • Project will raise property values of surrounding businesses

  What projects will receive priority?

  • Priority will be given to the following project types:

    • Projects submitted by applicants from underrepresented communities

    • Projects that develop or redevelop vacant land or blighted buildings

    • Projects that resolve a health or safety risk

    • Projects that are located in areas that meet the objectives of a strategic plan adopted by a public body

I am located just outside of the boundaries, can I apply?

You must fall within the corridors listed.

My business lost money during COVID-19, can I apply for funds to cover those expenses under this program?

No, this program cannot cover lost revenue or other operating expenses.

My project has already started, can I apply for funds under this program?

This funding cannot be used for work that is already underway. This funding can cover additions made to the original project plans. These additions should be referenced in the application. Please highlight how this funding allows for an addition in your grant application.

I need to start my project prior to grant decision, can I apply for funds under this program?

This funding cannot be used for work started before a grant decision and agreement is made. If your project is constructed in multiple phases, you can apply for funds to support a later phase of your project.

Do I need to complete my application in English?

Please contact Megan if you require assistance with completing the application in a language other than English.

My project will not be completed by June 1st, 2026. Can I still apply?

Work receiving funding under this program must be completed by June 1st, 2026. If your project is multi-phase, please submit a grant request only for the phase(s) of your project that will be completed by June 1st, 2026.

I am leasing a space, can I apply for funds under this program?

If your business is leasing a space, you should work with your landlord to determine if eligible work can be performed on your business. Grant funds will be awarded to the party responsible for paying for any eligible work.

What can be used for the matching funds?

Applicants must match 200% of this grant award with non-state/federal funds. If that match has been made, other state/federal programs can cover the remaining match.

If a project costs $100,000 and an applicant is asking for the full 30% ($30,000), the applicant must come up with at least $60,000 of non-state/federal funds. The remaining 10% can come from another state/federal grant award.

In another scenario, if a project is $200,000 and the applicant is asking for 15% (still $30,000), the applicant must still come up with $60,000 in non-state/federal funds. The remaining $110,000 could come from the state/federal grant award

Matching Funds

For a project receiving a Leveraged Grant, can matching funds expended prior to the project being awarded count towards the match?

Any project funds expended prior to July 1, 2021 cannot count towards the matching requirements of a Leveraged Grant.

Up to 50% of project funds expended AFTER July 1, 2021, and BEFORE being awarded can, with acceptable documentation of prior expenditures, count towards the matching requirements of a Leveraged Grant.

Here is what that might look like for a $2.5m project:

• An applicant with an eligible project request $750,000 is leverage grants.

• Recipient has secured $1,750,000 in matching funds.

• The project has spent $875,000 (50% of $1.75m) in project cost after July 1st, 2021, prior to being awarded. With acceptable documentation of prior expenditures, this could count towards match.

• A total of $1,625,000 (grant plus new matching) is invested in the project after being awarded.

Does the purchase of real estate count towards matching or is that ruled out as it is not an eligible match expense?

Purchase of real estate does not count towards match.

Can project expenditures that occur prior to being awarded a leverage grant be paid for with a leveraged grant?

No. However those expenditures may count towards matching requirements of a leveraged grants.

The law says that state or federal funds may not be used to meet the 200% matching requirements of a Leveraged Grant. Which of these are considered eligible matching sources?

Private funds (cash, private loans, etc)

Local government funds (City, County, Political Subdivisions, EDAs, etc.)

New Market Tax Credits

SBA 7a Loans

SBA 504 Loans

The following are considered NOT eligible for matching funds:

• CARES Act Funds

• Community Development Block Grant Funds

• Any other direct state of federal funds

• State Grants/Loans (MIF, JCF, Community Development Funds, etc.)

• State or Federally Source Revolving Loan Funds

• State or Federally sourced Revolving Loan Funds that have completely revolved

Grant awards can cover up to 30% of an eligible project’s cost, up to $150,000. Projects must demonstrate that they have outside funding from sources such as public or private grants or loans, developer equity, or insurance proceeds. All Main Street grants must be matched with non-state and non-federal funds at a rate of 2 to 1.

Other Eligible Expenses

Is an equipment an eligible project expense?

• Equipment is not eligible unless it falls under the definition of a capital improvement. For equipment to qualify as a capital improvement it has to be a tangible fixed asset of a capital nature and purchased and installed upon initial acquisition and construction of a building, expansion or major remodeling and necessary for the intended purpose of the facility.

• Examples of equipment that meets this definition could include walk-in coolers, kitchen ranges and ovens, vent hoods, security equipment, restroom equipment, etc.

• Equipment that is not installed in facility such as furniture, computers, etc are not considered capital improvements to the facility itself. In other words if a piece of equipment can be picked up and moved out the facility and be quickly converted to cash it’s not eligible.

• Examples of equipment that does not meet the definition of capital improvement could include things like tables, chairs, tablets, computers, utensils, office supplies, printers, etc.

Do mechanical upgrades (ie. new heating and air conditioning) qualify for this grant?

• Capital improvements or replacement of structural components of a facility are an eligible expenses for this program. HVAC systems are considered a structural component. We are relying on IRS definition of structural component defined in 26 CFR 1.48-1(e)(2) .

• The term “structural component,” includes such parts of a building as walls, partitions, floors and ceilings, as well as any permanent coverings therefore such as paneling or tiling; windows and doors; all components (whether in, on, or adjacent to the building) of a central air conditioning or heating system, including motors, compressors, pipes and ducts; plumbing and plumbing fixtures, such as sinks and bathtubs; electric wiring and lighting fixtures; chimneys; stairs; escalators, and elevators, including all components thereof; sprinkler systems; fire escapes; and other components relating to the operation or maintenance of a building.

• Repairing or upgrading an HVAC is a capital improvement of structural component so in that sense it is an eligible expense.

Are housing projects eligible for this program?

Single and multi-family housing projects are not eligible for this program unless it includes mixed use commercial space. For example, an eligible mixed-use commercial development could include ground-floor commercial space with 2nd and 3rd-floor multi-family housing.

An application is requesting funds to develop a facility in Minnesota and is headquartered in another state. Are they eligible for this program?

As long as the funds are exclusively used for Minnesota-based operations and facilities and all required Minnesota registrations are in place, the project is not excluded from participating in this program.