FAIRMONT — The Fairmont Economic Development Authority is asking the city of Fairmont to apply for $300,000 in funds from the state to assist in the expansion of Zierke Built Manufacturing.

In August 2017, Zierke moved its operations from multiple buildings in Winnebago to the former US Foods building at 1500 Winnebago Ave., bringing 30 existing jobs and adding another 20 since. The company custom builds fuel tanks and trailers to support generators.

“This time, they plan to purchase a laser cutter and a brake press and hire an additional 20 employees in three years,” Linsey Preuss, Fairmont economic development director, told FEDA members Monday.

Preuss worked with Greg Zierke, president of Zierke Built Manufacturing, during the company’s relocation to Fairmont. The city offered a 10-year tax abatement for 100 percent of the property tax on the building, with the amount not to exceed $231,000 over the 10-year span. Zierke pays the taxes but then is reimbursed by the city if certain criteria are met. One of the stipulations involves the hiring of 30 employees over three years, and the company is well on its way to that goal.

With the state funding, the company must purchase the designated equipment and create 20 new full-time jobs at a cash wage of $16 per hour.

The money would originate through the state’s Minnesota Investment Fund, which awards funds to local governments that, in turn, provide loans to assist in business expansion. All projects must meet minimum criteria for private investment, number of jobs created or retained and wages paid.

The city would apply to MIF for the funds. The money would be awarded to the city, which would make the loan to Zierke. Zierke would repay the loan to the city with a portion of the loan payments kept by FEDA as part of the program and a portion paid back to the state.

FEDA unanimously approved participating in the project by forgiving $60,000 of the $300,000 MIF loan in support of the company’s efforts to buy the equipment and create new jobs.

Andy Noll, FEDA chairman, said tax abatement cannot be used because there is no real estate involved in the expansion project.

“We wanted to find another way to be part of it, and we will still retain significant funds to reuse in the future,” he said.

As part of the MIF application process, the city must hold a public hearing to review the project. The Fairmont City Council met later Monday and set the public hearing for 5:30 p.m. April 22.

In another matter, Preuss reported that the child care group is working on a launch event to unveil its plans to alleviate the shortage of available child care slots in Fairmont and Martin County. A recent survey showed that Fairmont had a shortage of 81 child care slots, and some communities in the county did not have any child care providers.

On a positive note, Building Blocks, the child care center located at Lakeview Methodist Health Care Center, currently has 80 children but will expand to include 45 new spots when Lakeview’s new construction is completed.

“So we’re half way to our goal,” Preuss said.