By Lee Bloomquist
Business partners Nick and Jen Gigliotti and Joel and Candice Sjogren knew what they were up against when in October 2018 they purchased an early 1900s building in need of work on Chisholm’s Lake Street.
The roof leaked. A garage-type heater kept the building’s first floor warm, but not the second floor. And no cooling meant the inside of the building felt like a sauna from May into October.
In order to open a modern fitness center, the building needed major energy improvements.
With assistance from the Minnesota Department of the Iron Range Resources and Rehabilitation Business Energy Retrofit Grant Program, 30West Fitness and Recreation is open and thriving.
“We’re a new business and we’re being supported,” said co-owner Nick Gigliotti. “If we hadn’t done the retrofit, we knew it just would not have worked.”
The eight-year old grant program assists businesses within the IRRR service area to fund energy efficiency improvements.
What started as a pilot program in Hibbing has grown into one of the economic development agency’s most utilized business assistance programs.
Since 2013, the program has provided grants totaling $5.25 million to 307 businesses. That’s helped fund $19 million in energy efficiency projects at businesses within the agency’s 13,000 square-mile service area.
In 2019 alone, the program provided $1.25 million in grants to 82 businesses. That funding created more than $8.6 million in energy efficiency projects.
It’s a program designed to boost the sustainability of local businesses by saving energy costs. It helps keep northeastern Minnesota’s main streets alive.
“We know the cost to rehab existing buildings is high,” said Whitney Ridlon of Iron Range Resources and Rehabilitation development. “To ensure that existing businesses and downtowns are being utilized, this program helps offset the high costs and helps them save energy.”
The Virginia-based Arrowhead Economic Opportunity Agency (AEOA), which oversees a variety of housing and business rehabilitation programs within Minnesota’s Arrowhead region, administers the initiative.
“It’s been really successful in my opinion,” said Vince Meyer, AEOA commercial and multi-family production lead. “I would say that 40 percent of the businesses wouldn’t be able to move forward with what they wanted to do without the program.”
Businesses can fund projects such as new LED lighting, heating, cooling, on-demand water systems, windows, doors, insulation and roofs.
The program provides a maximum grant of $20,000 to cover up to one-third the project’s costs.
A primary goal is to help businesses reduce utility bills and reduce operating costs.
Coupled with investment from each business, the program helps companies remain competitive, employ local people and provide services to local residents.
The program started in 2013 with $250,000 in funding. But it’s popularity has since grown into budgets of $500,000 to $750,000 per year. In 2019, the program was budgeted at an all-time high $1.25 million. In each of the program’s eight years, its annual budget has been fully allocated.
For 2020, 53 projects are already funded, said Ridlon.
“I think there’s a lot of word of mouth going on,” said Ridlon. “Rudy’s in Aurora just inquired about the program after they heard about Boomtown using it. When you look at the list of who has been helped, it’s a lot of existing service businesses that are locally owned and employ local people.”
Meyer says the location of businesses utilizing the program has changed since its inception.
“Once it opened up in 2014 to the entire TAA (Taconite Assistance Area), it was kind of 70 percent downtown businesses and 30 percent everywhere else,” said Meyer. “But now, it seems to be more downtown businesses than folks on the outskirts. It’s a good example of fixing up the downtowns.”
In 2019, the list of businesses using the program included restaurants, a bakery, day care provider, resort, lumber yard, recreational retailer, meat processor, maple syrup producer, senior center, YMCA, dentist, newspaper office, auto dealer, car wash, bank, furniture store and others.
Without the program, the Gigliotti’s and Sjogren’s couldn’t successfully operate the fitness center, said Gigliotti.
To help open the facility, a new roof was installed along with new heating and cooling systems and LED lighting.
“For the cost of things, we would have never been able to do it ourselves,” said Gigliotti. “We would have had to take out a loan, which would have really set us back. What I like about the grant so much is that it understands reality. That little bit of help was what we needed in order to do what we needed to do.”
Beyond IRR and business owner funding, a variety of energy efficiency rebates are also available to businesses through the region’s electric utility providers, along with other funding sources, said Meyer.
“There’s so many other opportunities for these businesses to leverage funds,” said Meyer. “What’s good about this program is that it helps businesses get to know the other leverage funders that are out there.”
Application information for the program is available on the IRR and AEOA web sites.
“It’s super easy on the front end,” Ridlon said of the application process. “Being very easy on the front end is helpful for businesses. The program can really help you do your whole storefront. And the amount of money some of them are saving is insane.”
For the Gigliotti’s and Sjogren’s, development of 30West Fitness and Recreation is not just about opening a new business. It’s about creating a new healthy quality-of-life amenity for residents, entrepreneurship, injecting new life into downtown Chisholm, and preserving a stately building.
“We just wanted to breathe life into it,” said Gigliotti. “Especially, this building – it’s got so much life to live.”