15th Street Flats expected to break ground next month
WILLMAR -- The way is clear for Commonwealth Development to break ground 15th Street Flats, the new multi-unit housing project which will offer 47 apartments for a wide range of Willmar renters.
WILLMAR - The way is clear for Commonwealth Development to break ground 15th Street Flats, the new multi-unit housing project which will offer 47 apartments for a wide range of Willmar renters.
The Willmar City Council this week approved the tax increment financing development agreement between the city and developer, the last step before construction.
"They hope to break ground next month," said Bruce Peterson, Willmar Planning and Development Services director, speaking at Monday's council meeting. The agreement said construction must begin by Oct. 1 and the project must reach substantial completion by Oct. 31, 2019.
The development agreement was approved by the council in a 7 to 1 vote, with only Councilor Ron Christianson voting against it.
The city agreed to reimburse Commonwealth Development for some of the costs of constructing 15th Street Flats, including site preparations, by using tax increment financing. The city will pay back approximately $525,387 to Commonwealth over 15 years using the increased property taxes from the finished project. The city will continue to collect the current taxes on the property.
"If the tax increments are not there to pay off the note, the developer does not receive the full note payment," Peterson said.
Once the 15 years are up, the city will keep the full value of the property taxes on the development.
The total project is estimated to cost $9.3 million, with the majority of the financing coming from $8 million in tax credits and $1,259,000 in Minnesota Housing investment. According to Minnesota Housing, the tax credits are dollar-for-dollar federal tax credits for affordable housing investments, while the Minnesota Housing investment portion may include deferred and/or amortizing loans and grants.
The 15th Street Flats project has been in the works for over a year. Commonwealth Development first came to the City Council in May 2017, following months of meetings with other organizations including the Kandiyohi County and city of Willmar Economic Development Commission.
"This is a project we have been working on for quite some time," Peterson said.
15th Street Flats, located on15th Street Southeast, will have 47 units at varying rental rates to be determined by the renter's income. There will be no age restrictions on who can live in the building. There will also be four units set aside for those who are homeless to help them get back on their feet.
"It really provides a full range of housing, up to market rate workforce," Peterson said.
The largest units will be three bedrooms and some of them will even by two stories, which is rather unique to the Willmar market, Peterson said. The development will have a playground, fitness center and community room.
"All the plans have been reviewed. We are ready to issue permits," Peterson said.
This will be one of the first workforce housing projects to take off in Willmar since a housing study found a great need for such opportunities. There is at least one more workforce housing project in the works, a two- to three-building complex by the Southwest Minnesota Housing Partnership on Lakeland Drive Northeast. Federal tax credits are being sought to pay for most of the project, and a TIF agreement with the city will be sought.
While the city and the housing partnership wait to hear about the tax credits for the Lakeland project, the city and Commonwealth can look forward to seeing a building go up to help alleviate the tight rental market in Willmar.
"They are very excited to get going on the project. Quite frankly, we are very excited to see it happen," Peterson said.