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Hutchinson, Minn., businessman proposes redeveloping Willmar, Minn., mobile home park

WILLMAR — Hutchinson businessman Gus Wurdell is proposing to redevelop the rundown Regency East Mobile Home Park on Lakeland Drive Northeast. Regency East has 120 lots but about 40 are occupied. Many homes have been removed.

Wurdell proposes to replace the older mobile homes with new manufactured homes. The homes would be permanently located at the park, and the occupants would own their home but would rent the lot.

A security system would be installed, crime-free and drug-free rules would be enforced, and infrastructure such as electrical service would be updated. No dogs would be allowed.

The proposal would improve an eyesore that city officials have been working to clean up. The city condemned a number of trailers as unsafe in the past and many have been removed or demolished during the past year.

Wurdell is a developer and owns McDonald’s Mobile Home Park in Hutchinson. He said the park is 100 percent occupied, is well-run and provides a safe environment.

Wurdell says manufactured homes offer an affordable way to meet the housing needs that are not being met for a segment of Willmar’s population.

“Everyone has a different need in their housing lifestyle, and I see this need is not being met here,’’ he said. “It is an emerging market population that primarily occupies these parks. I can give many examples of successful parks with the same demographics. The need is affordable housing for larger families.’’

Wurdell discussed his proposal with the City Council’s Community Development Committee on Thursday and committee members expressed support for the proposal.

“It’s a step in the right direction,’’ said Jim Dokken.

Wurdell said the problem with the present park is lack of accountability with the owner.

“The owner is not finding himself accountable for what’s going on,’’ Wurdell. “To be successful, it comes down to management.’’

Wurdell said he has a letter of intent, signed by the owner, to buy the park, contingent on Wurdell being able to redevelop it in a way that will be successful for the community, the tenants and himself.

Current park residents pay what Wurdell calls a ridiculous rent of $330 per month. Wurdell said he will reduce the rent to $230 to $240 per month. He will offer home packages and says combined rent and home purchase payments would total $680 per month for a 5-bedroom, 2-bath home.

The committee agreed with Bruce Peterson, planning and development director, that he would work with Wurdell after Wurdell submits formal requests for financing assistance in the form of revenue bonds and creation of a tax increment financing district.

“By reducing the lot rent, I will reduce the revenue that comes out of the park to service my debt,’’ Wurdell said. “I would need those two things to make this a reality.’’

According to government sources, tax increment financing is a mechanism to capture the net new or incremental taxes that are created when a vacant or underutilized property is redeveloped and those revenues are used to help finance the project.

Wurdell estimates the combined personal property taxes paid by the homeowners and real estate tax will increase from $18,000 per year to $72,000 per year when fully occupied. He estimated his project would take five years to complete.

In an interview, Peterson said Willmar has never used tax increment financing for housing infrastructure projects, although state law allows TIF to be used for affordable housing development.

Peterson said the city has wisely and successfully used TIF for commercial and industrial development and has no active TIF districts at this time.

Peterson said the city typically can get a revenue bond at a lower interest rate. A developer must demonstrate to the bond market that the revenues generated by the project are sufficient to cover the bond payments, he said.

Wurdell said he has financial partners that would be interested in buying those bonds.

“I’m really excited about the opportunity,’’ he said.

David Little
David Little covers the Willmar City Council, Willmar Municipal Utilities and other city news.
(320) 235-1150