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Spring construction expected on new Willmar apartment complex

Art by YHR Partners JH LLC plans to start construction this spring of the first building in its planned four-building apartment complex in Willmar. The Willmar City Council approved tax increment finacing for the project at Monday's council meeting. The complex will be located on 15 acres on Kandiyohi County Road 5, north of Seventh Avenue Northwest.

WILLMAR — Construction is scheduled to begin this spring on the first major market-rate housing project to be built in Willmar for several years. Over the past week, both the Willmar Planning Commission and the Willmar City Council made decisions that significantly move the housing project forward.

The multi-family housing complex, which will be owned and managed by JH LLC of Fergus Falls, is planned to have four, 72-unit apartment buildings located on 15 acres along the west side of Kandiyohi County Road 5, north of Seventh Avenue Northwest. Eighty percent of the units will be market rate, meaning there will be no income restrictions for potential renters.

"There is a great, continuing need for rental housing in the city of Willmar," said Bruce Peterson, Willmar Planning and Development Services director, at the Willmar City Council meeting on Monday.

The Willmar City Council on Monday unanimously approved a tax increment financing district for the housing project. The district was requested by JH LLC in October. The council also established the state-mandated municipal development district around the project location and the preliminary plat of the site.

The taxing jurisdictions will forgo any new tax revenue from the completed buildings for the duration of the district. Current taxes will continue to be collected.

The first building, which should be completed by summer 2020, is estimated over the life of the district to generate $1.6 million in tax increment — the additional property taxes generated by the improvements that are captured for development expenses.

If all four buildings are constructed, the tax increment for the developer would rise to approximately $7.2 million over the life of the district. Each building, following completed construction, will receive 15 years of tax increment. The overall district will run for no more than 18 years.

The total project costs for the first building are estimated around $9 million and near $30 million for the entire four-building complex.

"The markets have clearly demonstrated market-rate housing cannot be feasibly constructed without some level of governmental assistance," Peterson said.

The developer of the project can use the additional tax revenue to pay for eligible costs of the project, such as land acquisition, site preparations, utilities, stormwater controls, paving, lighting and building construction.

A public hearing was held prior to both votes. The only public comment came from Linda Mathiasen, the chairwoman of the Vision 2040 housing committee. She read a letter of support for the project.

"Market-rate rental development is an unmet need in our community," Mathiasen said. "More housing is needed to support our growing population and economy. We want people to not only work in Kandiyohi County, we want them to live in our community and contribute to our quality of life."

At the Jan. 2 Planning Commission meeting, the commission approved the conditional use permit for the complex following a public hearing during which there was no public comment. The commission did discuss needed road and infrastructure improvements. An expanded central turn lane will be needed on County Road 5 to handle the expected increased traffic flow. JH LLC will also need to pay for sewer improvements.

Peterson was on hand at that meeting as well and spoke in favor of the project.

"This project has the greatest potential to impact housing affordability in this community that we have seen for a long time," Peterson said.

The City Council also agrees the project should have a positive impact on housing needs and on the city as a whole.

"There is a lot of excitement, a lot of buzz in the community in regards to this. We are very pleased you have chosen Willmar for your next project, " Mayor Marv Calvin said at Monday's council meeting. "We know you will have no problem filling those units."