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BEMIDJI — More housing units could be on Bemidji's horizon.

During the Bemidji City Council work session on Tuesday, Sandy Hennum, Community Development Specialist of the discussed a grant opportunity that could partially fund a significant Bemidji housing project.

The opportunity comes from the which provides funds for affordable, multi-family, workforce housing projects across the state.

Councilors were handed a preliminary proposal before the work session and provided feedback. Now, the HRDC will finalize a proposal and seek council approval before the June 12 application deadline.

The HRDC plans to request the maximum grant amount of $500,000. Bemidji would be required to match the grant, meaning a proposed project could total $1 million.

Ward 2 Councilor Josh Peterson asked if the city could afford a $500,000 pledge.

City Manager Rich Spiczka explained that the city has a few different options to fund the project, but faces a challenge.

"Municipal governments, there's a heavier lift for us than there's ever been, and I don't think that's going away anytime soon," Spiczka said. "If you want housing or you want projects, the city is going to have to come help. That's just the reality.

"I think (Tax Increment Financing) is a definite player here. Depending on how it looks, it's usually 26 years. It just means that we're deferring collecting tax until utilities are basically paid for. So, it makes it affordable. I think because (the project is) infrastructure, there are enterprise funds that can be used as well. We're not looking straight at the levy. We also have housing dollars ... I think we have a multitude of options."

Currently, exact figures for TIF are not known. Mayor Jorge Prince asked if the HRDC and the city could provide this figure before council approval.

"It would be good to have that number," Prince said, "because if we were just able to fund this fully off TIF, for me, that's an easy decision; that becomes a no-brainer. If we have to pull dollars from housing funds or from utility accounts, then the (return on investment) question starts becoming a little bit more complex."

Prince then asked if the HRDC could afford a lower pledge, if deemed necessary by the council.

Hennum explained that even if the HRDC applies for $500,000, there is no guarantee that it would receive that amount. Thus, if the HRDC receives less than $1 million, whether from a lesser pledge or grant, it would downsize the project's scope as needed to ensure affordability. The project would not cease.

Overall, this opportunity is monumental, according to Hennum. Historically, Northland cities struggled to receive this grant as the majority of the funds did not leave the metro. Now, after successful lobbying efforts, 50% of the funds are set aside for greater Minnesota, giving Bemidji a chance.

"I would say on this grant, the fact that it's isolated to greater Minnesota almost never happens," Spiczka said. "With the climate and the space we have right now, with funding being shut down and frozen, or whatever, when we have a chance to at least attempt to get some (funds), I think we should think hard about that."

All present council members unanimously expressed support for a project after sharing thoughts and concerns — Ward 1 Councilor Gwenia Fiskevold Gould and At-Large Councilor Audrey Thayer were absent.

"I think this is a really good thing," Ward 4 Councilor Emelie Rivera said. "I just want to make sure that anything that we put forth as an application has a realistic representation of what (the city) can do and what is within the guidelines."

Prince later mentioned a housing study that could be published during the summer.

"It'll be interesting once we get our housing study back to see what we're short on," Prince began. "But boy, (this project) could go a long way to meeting those (needs)."

The HRDC will finalize its proposal, which should include all relevant information regarding a proposed project, grant amount, potential timeline and more. The council will review this proposal and cast a vote before the June 12 deadline.

The council will next meet for a regular meeting at 6 p.m. on Monday, June 2, at City Hall. All meetings can be viewed on the