MANKATO — A downtown Mankato child care center, which stopped making payments on a city-provided low-interest loan a year ago, is on the verge of being sold. But the sale and its continued operation as a day care may be contingent on the City Council forgiving the accrued interest on the loan.
The council, acting as the Mankato Economic Development Authority, is scheduled to consider the request Monday. The sale of Cultivate Mankato, founded by Candice Deal-Bartell more than six years ago, would include repayment of the loan’s remaining principal of $40,529 by the new owners — New Horizon Real Estate Development 6 LLP. But an agreement negotiated by city staff would not require the repayment of $5,727 in accrued interest.
“As Cultivate Mankato is unable to satisfy the remaining balance, the property owner has requested forgiveness of the accrued interest to facilitate the transaction,” a memo to the EDA states. “Forgiveness of the interest is consistent with the City’s strategic plan, which prioritizes support for childcare availability and affordability, small business development, workforce retention, and the growth of existing businesses. The proposed sale would preserve essential downtown childcare capacity.”
The 2018-19 renovation of a historic downtown Mankato building into a new day care center was made possible in part by a $125,000 City Center Renaissance Loan approved by the EDA in August 2018. The following February, Deal-Bartell sought an additional $75,000 to install a required fire-suppression system. Four years ago, the EDA agreed to defer loan payments throughout 2022 at 0% interest because the business was struggling in the midst of pandemic-related workforce shortages.
Payments resumed in 2023, but the last payment received by the city was in December 2024, according to the memo: “Staff have been working with the business, property owner, and other representatives from community organizations since May 2025 to identify possible solutions to the business’ needs and the need to address the outstanding loan.”
In a statement to The Free Press, Deal-Bartell said she’s proud of Cultivate Mankato’s work since it opened in September 2019.
“Our mission has always been to support children, families, and our community with high-quality early learning and care,” she said. “Like many childcare programs across Minnesota and the nation, we have faced significant financial pressures over the past several years. Despite every effort, including support from the city of Mankato and the EDA, the challenges ultimately became too great for us to overcome alone.”
If the sale moves forward, the facility at 227 E. Main St. will become the latest of several dozen New Horizon Academy day cares operating across seven states.
“New Horizon Academy is a well-established, Minnesota-based provider with nationally recognized accreditations, including those from the National Association for the Education of Young Children (NAEYC), the National Early Childhood Program Accreditation (NECPA), and a 4-star Parent Aware rating,” the staff memo states. “In accordance with the city’s Strategic Plan priorities and the potential to maintain critical childcare services in the downtown area, staff recommends approval of the request to forgive the remaining interest on the CCR loan.”
New Horizon is a family-owned business operating 107 day care facilities from Kansas to Idaho to Wisconsin, with 71 in Minnesota. Nearly all of the Minnesota facilities are in the seven-county metro area, but New Horizon also operates in Rochester and the St. Cloud area.
Deal-Bartell said she is confident New Horizon will perform well for both children and the facility’s staff.
“I am incredibly grateful that New Horizon Academy has stepped forward to purchase the property and carry forward the services that so many families rely on,” she said. “… While this transition is bittersweet, I am comforted knowing that New Horizon Academy will sustain and strengthen care and learning opportunities for children and continue to provide excellent employment.”