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– The city is offering $500,000 in loans and grants next year to help day care providers start or expand their businesses.

“The lack of child care continues to affect families and employers,” Mayor Emily Larson said while announcing the program Wednesday. “Those of us in the community who have children or have raised children understand how important it is you have safe, affordable, secure child care.”

The loans would come from the 1200 Fund, a nonprofit that is overseen by the city and provides gap funding for businesses. Applications for the loans, which top out at $50,000 per applicant, open Jan. 15. Preference will be given to those creating infant care positions or offering longer hours. The program will offer an unspecified mix of loans and grants.

“Very clearly there’s a need for this,” said the fund’s chairwoman, Betty George. “The economic value ... is overwhelming.”

The 1200 Fund was established in 1984 to help create jobs, and in addressing the child care shortage it may do so directly and indirectly.

A 2018 study by Wilder Research and the Center for Rural Policy and Development found that about 245 parents in the region would be working if they could find affordable child care.

“The total potential new earnings of families in northeastern Minnesota could reach $8.1 million annually if the child care shortage were solved,” the report said.

In total the region is short more than 4,000 child care openings — about 1,000 in Duluth — and the report estimated it could cost up to $2 million to add enough family care providers and up to $11.3 million to build or add capacity at child care centers.

Duluth City Council member Arik Forsman said investing in child care can help Duluth “become a destination for young families.”

Brooks Johnson • 218-491-6496