MONTEVIDEO — Hardly a day goes by that someone doesn’t call the city office in Clara City to inquire about the availability of rental units.
With only two houses on the market right now, housing is in tight supply.
Just a five-minute walk from the community’s downtown sits a nearly two-acre site, a prime location to build new housing.
“It’s very developable, but certainly not with that school sitting there,” said Steve Jones, city administrator for Clara City.
He addressed the Chippewa County Board of Commissioners on Tuesday to describe the community’s housing challenges, and pitch for support from the county in solving them. The city is hoping that the county will once again partner with the community to remove the former Clara City Junior High School building.
Now tax-forfeited, the property was eyed for demolition in 2018 when the county and city jointly sought a state grant for its removal. The grant was not awarded, and the deteriorated property remains a worry. The city has concerns about vandalism and the potential that young people would attempt to break into the structure.
An architect’s study had recommended its demolition due to its condition in 2018. The study estimated the demolition would cost $450,000.
Jones asked the county to consider fronting the costs for its removal. The city would create a tax increment district for the site in the hopes residential development would occur there. The increase in tax revenues from a developed site could be used over a 25-year period to repay the county one-half of the demolition costs, he explained.
The city administrator said the city has a one- or two-year time frame to address its housing needs before the issue grows too large. He pointed to the daily inquiries about demand for rental units as well as the concerns of employers in the community about housing for workers.
- Timing matters as Montevideo, Minnesota, breaks ground on needed rental housing project
- Gov. Walz announces federal funding for new Minnesota Veterans Homes, including in Montevideo
- MACCRAY approves new building plans
- Chippewa County to partner with Clara City in hopes of razing old school in favor of housing
He said that the community expects to see a one-third increase in daily traffic when the new MACCRAY school facilities open and staff and instructors now in the Maynard and Raymond locations make daily trips to town.
The Citizens Alliance Bank is continuing to see growth, and other developments could also increase the demand for housing in the community, the city manager told the county commissioners.
Jones also pointed to the opening in a few years time of the new State Veterans Home in Montevideo and the 100-plus jobs it will create as a factor in increased housing demand for the whole area.
Clara City has a large debt load and is unable to take on the demolition of the vacant junior high facility on its own, Jones told the county commissioners. It has a long list of other needs as well. It is working to obtain United States Department of Agriculture and federal Economic Development Agency funds to assist with infrastructure needs it cannot handle on its own. They’re estimated at $25 million, he said.
Some of the city’s financial stress is due to the economic challenges of operating the city-owned assisted living facility. The challenges of its operations and competing for labor will likely grow with the opening of the veterans nursing home.
The county pledged $3 million toward construction of the veterans home to make the project possible. The commitment has reduced the county’s reserve funds to a point lower than desired, county administrator Michelle May told the commissioners. Finding funds for the demolition of the Clara City facility will be a challenge for the county as well, the commissioners noted.
The commissioners informally voiced support for working with Clara City to remove the former junior high facility and address housing needs.