Photo by Deb Gau Jeff Gladis, housing director of United Community Action Partnership, spoke to the Marshall City Council during a hearing Tuesday night.

MARSHALL — The city will be seeking grant money to help improve residential and commercial buildings in town.

On Tuesday, members of the Marshall City Council gave their approval for the next step in the application process for Small Cities Development Program grant funding.

If the city receives the funding, it will help improve residences and commercial buildings in Marshall’s downtown area, said Jeff Gladis, housing director of United Community Action Partnership.

Gladis was the main presenter at a public hearing on the grant application. Gladis had spoken to the council about applying for Small Cities Development funding once before, in January 2017.

“We had talked about this a little last year,” Gladis said Tuesday. This year, Marshall made it through the first round of the application process, he said.

The city of Marshall, in conjunction with UCAP, will be applying for $603,750 in Small Cities Development grant funding as part of a total project of $1.569 million. Besides Small Cities Development funds, the project would also make use of Minnesota Investment Fund money.

The grant funds would be used for loans, which could be used to help make improvements to a mix of owner-occupied homes and commercial buildings.

Gladis said the goal was to complete housing rehab projects on at least 21 low to moderate income residences, and at least 14 commercial buildings in the area of Main Street and West College Drive. For residential properties, loans would be 80 percent financed by grant funding, and 20 percent by match requirements from other sources. For the commercial properties, grant funds would make up 60 percent of the financing, matching funds would cover 30 percent, and 10 percent would come from a loan that pays back to the city, Gladis said.

Gladis said the city would have to submit a form disclosing a possible conflict of interest for council member James Lozinski, who is a contractor. Gladis said the city will ultimately have to hear from the Minnesota Department of Employment and Economic Development on whether Lozinski would be allowed to bid on any of the rehab projects.

In discussion of the grant application, council member Glenn Bayerkohler said he had some reservations. Bayerkohler was concerned by the fact that there were income restrictions to be eligible for the residential rehab loans, but not the commercial rehab loans. There was a possibility that businesses that already had financial resources could receive assistance, he said.

“I question whether the government should be giving handouts” to recipients who might not need them, Bayerkohler said.

After the close of the hearing, council members voted 5-1 to approve submitting an application for the Small Cities Development grant funds. Bayerkohler cast the vote against, and Lozinski abstained.