Main Street Economic Revitalization Program (MSERP)
This is a state-funded initiative through the Department of Employment and Economic Development (DEED) intended to provide grants for capital improvement projects in commercial corridors across the State. See FAQ below.
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.
Under this program, projects involving the development, redevelopment, renovation, or repair of buildings are eligible for funding.
Funding is available to anyone planning 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 $150,000, or a maximum of 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
What are the geographic boundaries of the grant?
The boundaries are Levee Road to Plum Street and West Ave to West 5th Street, including adjacent businesses. This represents the core commercial area, excludes the government campus, and overlaps with the Historic Downtown District. This is a rigid boundary, and we cannot award projects outside the green area, except where a property is adjacent, for example, across the street.
What is the timeline of the grant application process?
The application will open in early May. Applications for the first round will be due at midnight on June 30th. We hope to notify applicants of award on July 15th, 2025. We may have another application period if all funds have not been utilized.
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. There will be no possibility of project extensions.
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 the local Historic Preservation Commission (HPC) and the State Historic Preservation Office, through the local HPC.
What is the maximum and minimum amount of funding that can be received under this program?
The minimum amount of funding available under this program is $25,000, which can be received by projects with a total cost of $75,000 or more.
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.
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.
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. Tenants may work with the building owner on a project, but the grant is payable to the building owner.
The grant documentation says this is a grant program for “Business.” Are businesses eligible to receive a grant?
Only building owners/developers can receive a grant from DTMS because the grant we received from DEED is specifically for renovations and projects for buildings or building sites.
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, and some types of projects not listed below may be eligible.
Development/Redevelopment
Building a new structure on previously vacant land.
Adding additional space to an existing structure.
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 a Review Commitee. The Committee will make recommendations to the Downtown Main Street Board of Directors, who will make the final award(s). DEED ultimately contracts with building owners on a Leverage Grant Form that DTMS will submit.
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 the 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:
The project will be a supplier or customer of other businesses
The project will increase traffic to surrounding businesses
The project will raise the 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
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, but it can be used for the next phase of your project or additions made to the original project plans. These additions should be referenced in the application. Please highlight how this funding allows for adding to the project scope in your grant application.
I need to start my project prior to the 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?
Don't hesitate to contact Megan if you need assistance completing the application in a language other than English or need accommodations to submit it.
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 must work with your landlord to determine if eligible work can be performed on your business. Grant funds will be awarded to the building owners only.
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 costs.
Example: If a project costs $100,000 and an applicant asks for the full 30% ($30,000), the applicant must raise at least $60,000 of non-state/federal funds.
In another scenario, if a project is $200,000 and the applicant asks for only 15% of the project costs (still $30,000), the applicant must still come up with $60,000 in non-state/federal funds. The remaining project costs of $110,000 could come from the state/federal grant award because it is not being used to match these funds.
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.
Example: Here is what that might look like for a $1M project:
An applicant with an eligible project requests a $150,000 grant.
The recipient has secured $850,000 in matching funds.
The project spent $425,000 (50% of $850,000) in project costs after July 1st, 2021, and before being awarded. With acceptable documentation of prior expenditures, this could count towards the match.
Does the purchase of real estate count towards matching,g or is that ruled out as it is not an eligible match expense?
Purchase of real estate does not count towards the match.
Can project expenditures that occur prior to being awarded a grant be paid for with a grant?
No. However, those expenditures may count towards matching requirements of a leveraged grant.
What is eligible to be used as matching funds?
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
What is NOT eligible to be used as matching funds?
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 matching funds secured before grants are awarded.
Other Eligible Expenses
Is 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 eligible expenses for this program. HVAC systems are considered a structural component. We are relying on the IRS definition of structural components 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 components 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 they include mixed-use commercial space. For example, an eligible mixed-use commercial development could include ground-floor commercial space with second—and third-floor multi-family housing.
An application requests funds to develop a building in Minnesota headquartered in another state. Are they eligible for this program?
The project is not excluded from participating in this program as long as the funds are exclusively used for Minnesota-based operations and facilities and all required Minnesota registrations are in place.
What are the contracting and bidding Requirements?
Any services or materials expected to cost $100,000 or more must undergo a formal notice and bidding process.
Services and/or materials that are expected to cost between $25,000 and $99,999 must be competitively awarded based on a minimum of three verbal quotes.
Services and/or materials that are expected to cost between $10,000 and $24,999 must be comparatively awarded based on a minimum of two verbal quotes or bids OR awarded to a targeted vendor.
You’ll need to provide support documentation of the purchasing and bidding process, including supporting justification for a since/sole source bid.
The grantee must not contract with vendors who are suspended or debarred in MN. That list can be found here: https://mn.gov/admin/osp/government/suspended-debarred/
How will payment be made if I am awarded a grant?
Once we receive proper documentation, you will be reimbursed for expenses. We anticipate payments being made monthly. A form will be provided for you to fill out and submit with your documentation.
Contact:
Megan Tsui
Senior Strategic Consultant
Red Wing Downtown Main Street
612-807-0804
The State of Minnesota Grant Contract Agreement #MSRG-24-0006-P-FY25 is the legal requirement for this grant program and superseeds any of the above information should they differ.
