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Willmar housing project 15th Street Flats clears a final hurdle

Erica Dischino / Tribune Construction is set to begin in June to build apartments in this area behind Pizza Ranch along 15th Street Southeast in Willmar. Tax increment financing and a zoning change were approved Tuesday by the Willmar City Council for the 15th Street Flats multi-family housing complex.

WILLMAR — With the approval Tuesday night of a tax increment financing district, the 15th Street Flats apartment project in Willmar has cleared one of its last hurdles and is now on schedule to begin construction in June.

"The city and the EDC have been working with Commonwealth Development for approximately a year to bring this project to the table, to fruition," said Bruce Peterson, Planning and Development director.

The resolution creating the district was approved by the Willmar City Council on a 7 to 0 vote, with Councilor Ron Christianson abstaining.

The City Council had given preliminary approval in June to a 15-year TIF district as part of the application process for the housing project to be granted tax credit funding. Those tax credits were approved in October, and Tuesday's council action officially approved the district.

"Like all TIF projects, the jurisdictions will be asked to forgo any new taxes on the site for a period of time," Peterson said.

Tax increment financing is a tool used by cities and other development authorities to finance certain types of development costs. Additional property taxes generated by a new development are used instead to pay for certain development expenses.

In the 15th Street Flats project, the tax increment financing will be for 15 years, generating approximately $585,823 in increment financing.

Both Kandiyohi County and Willmar Schools also were made aware of the TIF district, Peterson said, and there were no negative comments regarding it.

"They continue to be good partners in development," Peterson said.

The funds raised through the TIF will help the developer pay for a part of the $9.5 million total project.

"TIF will be used to partially offset the costs of site preparation, utilities, stormwater controls, paving and lighting," Peterson said.

15th Streets Flat will be a mid-level, multi-family housing complex with 47 units located on 15th Street Southeast, behind the Pizza Ranch. The property will include a community room, gym and a playground, which Jennie-O Turkey Store is helping fund with a $3,000 donation.

Those wanting to live at the new complex will be required to meet income guidelines.

"We are trying to serve a wide range of income and rent targets," said Erin Anderson of Commonwealth Development.

The majority of the units will be available to households making no more than 60 percent of the county's median income, or approximately $38,000 a year for a family of four. There will also be apartments for families who make 30 percent of the county's median income, around $15,000 for a family of four.

There will be five units specifically for those with disabilities and those will offer support services through United Community Action Program.

Another five units will be used to help families coming out of homelessness.

The City Council during Tuesday's meeting also had to approve the establishment of Municipal Development District No. 9. The creation of a municipal development district, which establishes the project area, is a must before a TIF district can be created, Peterson said.

"The purpose is to provide a rough framework for projects within that district," Peterson said.

A zoning change was required as well, and the council approved the rezoning of the 15th Street Flats location from general business to high-density residential.

"The apartment complex will make a very nice transition from the general business uses on Lakeland Drive back into the moderate-density residential neighborhood, wich transitions already into the single-family neighborhood," Peterson said, adding the Planning Commission was on board with the change. "They felt this was a good location for it, right off Lakeland Drive."

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