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15th Street Flats gains Willmar City Council support

Commonwealth Development A concept drawing of what 15th Street Flats could look like if built in Willmar. The Willmar City Council approved a resolution of support for the project at Monday's meeting.

WILLMAR — If all goes as planned, Willmar could see the opening of a much needed housing project in spring 2019. 15th Street Flats, a workforce housing project by Commonwealth Development, would provide 47 affordable units in a four-story building on 15th Street Southeast, just off Lakeland Drive and behind the Pizza Ranch.

"It will create much needed housing and a very unique project for the city of Willmar," said Bruce Peterson, Planning and Development director.

The Willmar City Council, at its Monday meeting, approved a resolution supporting the project. The resolution also includes preliminary approval of a 15-year housing tax increment financing district.

The resolution passed on a 5-0 vote with two abstentions. Councilor Shawn Mueske was absent.

"I am pleased we have a housing developer that is interested in investing over $9 million in affordable housing," said Aaron Backman, executive director of the Kandiyohi County and City of Willmar Economic Development Commission.

The tax increment financing district would generate $39,058 a year in increment financing available to Commonwealth, or a net present value of about $464,562 over the life of the TIF district, if approved by the city, Kandiyohi County and Willmar Public Schools.

The base taxes of the property will continue to be paid to the city, county and school. Tax increment financing allows the use of additional property taxes generated by a new development to be captured to pay for certain development expenses.

Once the TIF district retires, the taxing jurisdictions would see a large increase in the amount of taxes coming from that property, Peterson said. The county assessor has estimated the housing development would have a taxable value of $4.3 million. Currently, the land is valued at $104,500, according to Ehlers and Associates.

While the majority of the council approved of the project, Councilor Ron Christianson abstained from the vote, in part because he said he feels the housing project does not solve the real problem.

"Affordable housing means you can't afford housing," Christianson said, adding that low wages paid in Willmar are a major factor. He also said the city treats outside developers and businesses better than the city's own residents and businesses, by offering tax breaks and other assistance.

Councilor Andrew Plowman abstained from the vote due to personal acquaintances who are interested in developing projects.

Commonwealth Development, along with local partners including Vision 2040, has been working on this housing project for over a year. The development group has an agreement to purchase the land and will now be applying for tax credits from the Minnesota Housing Financing Agency to help fund the construction. A resolution of support from the city was necessary for the tax credit application.

Backman also said for the application to be competitive in St. Paul, a local match of about 5 percent would probably be needed. The TIF district proceeds would come to about 5.1 percent.

"A lot of work has been committed to this project over the last year," said Erin Anderson, of Commonwealth Development.

The building will include a few one-bedroom apartments, but the majority will be two- and three-bedroom units. The three-bedroom units will be two stories.

Five units will be designated for permanent housing for those dealing with homelessness and another five units will be specifically for disabled persons.

The building will have parking for all units and the design will fit with the surrounding area by using a neutral color palette and some natural material on the outside such as stone or wood shake. Building amenities will include a fitness center, office, meeting room, playground and community rooms.

The developers feel the location is optimal for this type of project, as it is near community amenities and will be located next to other multi-family buildings.

"15th Street Flats would offer a housing project that isn't available," Backman said.