Staff photo by Clay Schuldt The EDA is seeking to purchase the former Upper Midwest Management building at 1314 Westridge Road to convert it into a pod model day care facility.

NEW ULM– The New Ulm Economic Development Authority is authorized submitting a purchasing agreement for a building at 1314 Westridge Road to create a community space for child care.

The building could be used to run a day care center that operates in a pod model system. In the pod system, use of the building is common for up to four home day care providers.

The four day care providers would operate separate businesses, but share the space and resources. The pod model is beneficial for home day care providers who want to run a day care but do not have space or the resources at their own home.

Housing Coordinator Heather Bregel said adding family/home day care providers is quicker than a standard day care center, because day care centers are required to receive license approval from the state. The home/family day care licenses and the pod model only require county licensing.

City staff recently toured the building at 1314 Westridge Road. The building is for sale and could accommodate four licensing providers in the pod model. The city has identified two providers who would be willing to rent space for a child care business.

Bregel said if the EDA wanted to move forward with purchasing the building, it could partner with a nonprofit organization to manage a capital campaign to pay for the building.

The EDA has already received a $30,000 grant for rehabilitation of the building. It is estimated the property would cost $500,000 to acquire.

The board was supportive of moving forward with the project, but there was some concern this was not the most efficient use of funds.

Board chairman Daniel Braam was reluctant to put $500,000 into a project that created eight infant openings. He was concerned the EDA was putting all its eggs in the same basket rather than considering a range of options. He was also concerned if the EDA bought the building, other businesses might be reluctant to help with fundraising.

Bregel was confident local businesses would continue to support project. She believed it would be harder to raise funds if the EDA did not show it was moving forward with the project.

She compared it to the Career and Technical Education (CTE) Center. After the building was acquired by the school, other donors were willing to provide financial support for the project. She believed the business community would help raise funds if the EDA took the first steps.

“I have faith and optimism in our community that they will step up to the plate,” Bregel said.

Board member Les Schultz expressed concern that current home day care providers would simply move into this building. In this case, the city would not have created any new day care providers. He wondered if it would be more cost effective to open a day care center, as it would create new openings.

Bregel said this project was about retention. The city has already lost one provider who wanted run the day care outside her home, but no space was available. Another provider said she will close her day care operation if she could not find space outside her home.

“It is very hard on your home to run a child care. It’s very invasive to your family,” Bregel said. “Part of it is retaining providers and not losing them.”

Bregel believed the pod model could help recruit providers who want to run day care but do not have the space available or are renting, and the landlord will not approve a day care business.

Board member Andrea Boettger was in favor of moving forward with this project. She said there would always be alternative options, but after 18 months of addressing the day care shortage, this was the only option available for expansion now.

She shared Bregel’s confidence that local businesses would support the project.

Board member Tom Berg said unless there another plan for expanding day care, this was the best way to go. He did not feel this was a significant financial risk.

Bregel said the $500,000 cost estimate might not be the final cost. Additional grants and donations from the community could come forward. Some additional money could fund another day care center in the future.

Ultimately the board decided to move forward with possibly purchasing the building. The EDA went into closed session to discuss a purchase price. In the executive session, the board agreed on a price to submit an offer.