St. Cloud Planning Commission Recommends $670K in Federal Block Grants, Adds Youth Funding

(KNSI) – The St. Cloud Planning Commission voted 5-1 Wednesday morning to recommend how the city should distribute approximately $670,000 in federal Community Development Block Grant funds for 2026.

The commission’s recommendation shifts significantly from city staff’s initial proposal, adding funding for YouthSet Inc., which had been excluded from staff recommendations.

YouthSet would receive $75,000 to refurbish a gymnasium, the St. Cloud Housing and Redevelopment Authority would get $164,500 for single-family homeowner rehabilitation, and Central Minnesota Habitat for Humanity would receive $200,500 for Westwood infrastructure development.

Place of Hope Ministries would get $79,000 for its overflow compassion shelter, significantly more than the $74,000 staff recommended. Smaller allocations include $11,000 for Tri-County Action Program’s Project Homeless Connect and $10,000 for Lutheran Social Services’ St. Cloud Area Crisis Nursery program. Another $130,000 would go toward program administration.

The commission’s action leaves several applicants unfunded, including the Center for African Immigrants and Refugees Organization (CAIRO), 180 Degrees Inc., Central Minnesota Housing Partnership, and Stepping Stone Emergency Housing.

There were deep divisions on how much of the funds to use for housing, a core function of CDBG funding. Data from the state shows St. Cloud’s poverty rate at 20%, well above the state average of 9%.

Commissioner Marty Czech told the board he wanted to reduce the funds offered to the HRA program because, “I don’t think putting a Band-Aid on a couple of houses, 10 to 15 houses, is going to do anything. We receive these funds because of the poverty.” The program helps homeowners make repairs so they can stay in their homes. The funds are usually spent on older homes that need major upgrades that the homeowner can’t afford.

Several commissioners supported funding YouthSet, saying it would be a big benefit to youth in the area to have a place to go and have fun.
However, city staff warned of risks with the YouthSet funding. Director Matt Glaesman explained to the commission, “I want you to be aware that the use of the gym was not authorized by the planned unit development. They have to go through a land-use entitlement step, which you might recall, that concept was controversial and ended up at the council being a challenging decision.”

Many neighbors around the center were against allowing it because of the increase in traffic.

The commission chose not to fund CAIRO’s request despite passionate advocacy from some commissioners, including Charlie Hobbs. “I think of what Martin Luther King Jr. said when he talked about poverty being one of the greatest evils, and community being one of the greatest goods. And I will not be comfortable supporting anything today that does not include some substantial support for CAIRO’s project.”

The organization is looking to build a 70-unit mixed-use apartment complex on the corner of 3rd Street North and 33rd Avenue North, where a former Wells Fargo Bank branch once operated.

Commissioner Claire Richards expressed concerns about the project’s financing gap. “With CAIRO in particular, it does make me incredibly nervous that they’ve secured $500,000 of the $20 million required to do that project, and I think that puts us in a really precarious situation.”

She stated she supports the project overall and that there is time for them to come back to the city for help in the future. The goal is to build and open in 2028.

The commission’s recommendation now advances to the St. Cloud City Council for a second public hearing and final decision in March. The 2026 Annual Action Plan must be submitted to the U.S. Department of Housing and Urban Development in May.

Eleven organizations initially requested $1.6 million in CDBG funding before one applicant withdrew its request.

The CDBG program provides annual federal funding to St. Cloud to address housing and community development needs, with a focus on benefiting low and moderate-income residents.

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