WILLMAR — The proposed sale of four city-owned lots on Block 25 in downtown Willmar will be moving into the next phase, as the Willmar City Council on Monday passed a resolution introducing the land sale ordinance and setting a public hearing.

The potential purchaser of the four lots is Lumber One Development Company, which hopes to construct a 57-unit, market-rate apartment complex on the block.

"We are really excited about this project," said Ted Schmid, COO with Lumber One. "There is a real need."

The public hearing will be May 17. The council can act on approving the sale following the hearing. The Willmar Planning Commission at its April 21 meeting recommended approval of the sale.

Block 25 is located between Second and Third Street Streets Southwest, bordered by U.S. Highway 12 and Benson Avenue in downtown Willmar. It is also located within the Willmar Renaissance Zone, an economic development program approved by the city in May 2020. The pilot program offers a variety of development incentives including free building permits and utility hook-ups and practically free city-owned property, such as the four city lots on Block 25.

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"The only thing making this project feasible is our incentives for the Willmar Renaissance Zone," said David Ramstad, Planning and Development director.

The proposed sale price for the four lots on the west side of the block is $1 per lot. The lots have an assessed value of $91,000 but are tax-exempt under city ownership. The land is currently being used as a city-owned parking lot, which Willmar Planning and Development staff have said is hardly ever full.

"Only about 19 spaces of the 48 parking spaces on the city-owned lot are used at the height of each business day," Ramstad said.

Lumber One is also working on purchasing the lots on the east side of the block, portions of which used to be the location of Nelsen's Laundry. Due to her family being involved in the sale of that land, Councilor Audrey Nelsen removed herself from the land sale discussion and abstained from voting. If the private land sale does not go through, the city land sale will not move forward.

"The private and public land sales are contingent on one another," Ramstad said.

The apartment project has an estimated price tag of $10 million, which Ramstad said will end with the city collecting $50,000 per year in taxes, after any tax increment financing is concluded.

"Return what is marginally used property to a significantly higher and better use," Ramstad said.

There was positive feedback shared regarding the apartment project at the council meeting.

"Today is a new beginning. This is the first major Renaissance Zone project in Willmar," said Aaron Backman, executive director of the Kandiyohi County and City of Willmar Economic Development Commission. "This project represents the largest single investment in downtown since the 2002 Rice Hospital expansion."

Housing availability in Willmar has been a concern for some time. This project would add another layer of available units, geared more toward small households such as singles or couples wanting to live in downtown. It will also bring needed development to the poorest census tract in the city.

"This is exactly how we hoped this would play out," when the Renaissance Zone was formed, said Councilor Julie Asmus. "This will be a fabulous addition to our downtown."