WILLMAR — The number of apartment units continues to increase in Willmar as multi-family housing developments are constructed and opened.
Aaron Backman, director of the Kandiyohi County and City of Willmar Economic Development Commission, updated the commission's joint operations board Sept. 9 about projects at various levels of development.
Block 25 Flats, to be constructed in downtown Willmar, is moving along, even though there have been some delays due to site contamination.
"That has been a fun project to work on," Backman said. "It is the first major Renaissance Zone project."
Lumber One Development Company purchased all the parcels on Block 25, located between Second and Third Street Streets Southwest, bordered by U.S. Highway 12 and Benson Avenue, to build a 57-unit apartment complex. While doing soil borings on the property a petroleum contamination issue was uncovered, which as required the developer to do more intense environmental assessments. Once the developer is able to clear up the environmental concerns on the site, Backman said the project should be able to get back on track.
"That sort of slowed down the process. We lost about 60 days," Backman said.
The Preserve on 24th project, a three-building apartment complex to be constructed behind PetSmart in the Waterview Business Park, should be under construction soon. And starting in 2022, Suite Liv'n could begin construction of its new buildings near Ridgewater College.
JH LLC is is moving forward with the third phase of its four-building complex on Kandiyohi County Road 5 on the west side of Willmar. The first two buildings of the project have been completed and units rented out. The construction of the third, 72-unit building is to begin shortly.
"Mr. Herzog (the developer) is so optimistic of the Willmar area he is seriously considering accelerating phase 4, which is another 72 units, this fall," Backman said. "And he has asked me to look for more sites in Willmar."
There could be even more apartment projects on the horizon. A developer has approached the EDC about a major project on Block 50 in downtown Willmar. The site is the large parking lot between the Willmar Public Library, Bethel Lutheran Church and Rice Memorial Hospital. Backman said the project would include residential, commercial and perhaps even a public parking structure.
"We have a signed letter of intent," Backman said.
While all the apartment projects are positive for Willmar, members of the board did raise concerns about another housing option that has been lacking.
"What is the city doing about single-family housing?" asked Kelly Terwisscha, board president. "That seems to be the next thing that is going to be a big gap."
According to Minnesota REALTORS, in August, Kandiyohi County only had 1.7-month supply of single-family homes available for sale, a 50% drop from the same time in 2020. There were 71 new listings in August, up slightly from 2020. The average sale price for a home in August was $230,000, a 25% increase over 2020.
Backman said while individual single-family homes continue to be built in the county, finding a developer with the money to create a successful housing development is difficult financially. Finding open land is another issue, and the land that is available might require significant infrastructure investment on the developer's end, adding to the overall cost.
"Part of the challenge for single-family home construction, it often doesn't pencil out unless you are talking more than $300,000," sale prices for the homes, Backman said. While apartment projects are able to spread the cost over more units, a housing project is usually much smaller.
To make a single-family housing development feasible for a builder, governmental assistance might be needed.
"I feel like the city might end up having to look at doing something," Terwisscha said.
The good news is Willmar continues to grow and that has gotten the attention of developers from around the state. In the 2020 Census, Willmar grew to 21,015 people, finally breaking the 20,000 ceiling. More people could mean more development opportunities.
"That is the fastest growth rate since the 1990 Census for us," Backman said. "Many places in greater Minnesota did not see that."