Perhaps only time will be able to take away the emotional sting of last year's flooding in downtown Beaver Dam.

The financial blow to the city, however, was softened considerably Tuesday when Gov. Jim Doyle announced that Beaver Dam would receive $3.7 million in federal supplemental funds under the Community Development Block Grant program. In all, 34 communities shared $39.2 million in block grant funding, with Beaver Dam netting 9.5 percent of the available money.

"This is wonderful, great news for the city of Beaver Dam," Mayor Tom Kennedy said. "This is exactly what we needed and is a great thing for the future of downtown, the future of the city and the citizens of Beaver Dam."

Beaver Dam received the second-highest award of any individual city, trailing only West Allis ($4.2 million). Jefferson ($4 million), Vernon ($4 million) and Waukesha ($4.4 million) counties, meanwhile, earned the only other higher awards.

Nearly $2 million of Beaver Dam's grant will go toward the city's downtown revitalization plan, which included the acquisition and demolition of 10 downtown properties and the removal of culverts in Tower Parking Lot.

The other $1.7 million was awarded to Wisconsin Redevelopment for the development of 33 loft-style apartments at an old cotton mill, later the Weyco Shoe Factory.

"I'm personally very pleased with the award," Kennedy said. "It will certainly go toward limiting the expenses the city of Beaver Dam must contribute to the project overall. The flooding last year was difficult for a lot of people, but this sizeable amount of money is going to be a really big help and is due to the great efforts of many, many people on our staff."

The money for phase one of the downtown plan has already been borrowed by the city, but Tuesday's block grant award will significantly reduce or eliminate the need to borrow for phase two next year.

The willingness by the city to commit money to avoid future flooding, along with the damage suffered last summer, was key to its application's success.

"I think Beaver Dam put in a strong application and we were pleased that we were able to help," Department of Commerce spokesman Tony Hozeny said. "The governor worked very hard with communities to make sure they could recover, and when a community like Beaver Dam shows they're willing to commit their own funds, it makes it easier to move forward."

Other downtown revitalization projects listed in the award include a pedestrian bridge at Tower Parking Lot, facade improvements of remaining flood fringe properties and the construction of a flood wall.

The flood wall, however, may not be constructed.

Mayor Kennedy said the benefit of such a project would be to remove the flood fringe designation from the buildings still near the river. But there is no clear answer whether a wall would accomplish that initiative. Until the city gets a solid answer from FEMA and the DNR, that project is on hold.

"Wisconsin's people, communities and businesses reacted to the natural disasters last summer with spirit, hard work, and generosity," Gov. Doyle said in Lake Delton Tuesday. "Securing this additional federal funding will help families and businesses continue to recover from the worst flooding in our state's history."

Weyco project gets extension

The $1.7 million block grant award wasn't the only good piece of news Wisconsin Redevelopment received Tuesday.

The community development committee unanimously agreed to a 60-day extension, giving the developer until Aug. 31 to close on the Weyco property. The full council must now approve the resolution Monday.

Operating under the confines of a sluggish economy, Wisconsin Redevelopment needs more time to sell the WHEDA tax credits it was awarded earlier in the year as well as investigate further funding possibilities. One such opportunity could help pay for environmental clean-up at the former Weyco site.

Receiving the block grant from the department of commerce will only help Wisconsin Redevelopment as it seeks investors for its tax credits.

"The grant is really going to be helpful because it gives investors confidence that there are other partners in the game," Wisconsin Redevelopment's Todd Hutchison said. "The department of commerce is involved, the state is involved, the city of Beaver Dam is involved, and it feels really good because it's a big step forward."