A $10.5 million project to build 42 homes in Alexandria will receive tax assistance – Alexandria Sada Press

ALEXANDRIA — Habitat for Humanity Douglas County’s plan to build 42 detached single-family homes south of Scenic Heights Road and Seasons Drive in northeast Alexandria will receive tax assistance from the city.

The Alexandria City Council, at its Nov. 13 meeting, approved all paperwork for the project to seek tax increment financing, known as TIF.

The total cost of the affordable housing project is approximately $10.5 million, and includes homes, expansions and connections to public streets, sanitation, and city water and stormwater management.

The homes will be built over 10 years, and each home will be occupied by families earning 80% or less of the area median income. This amounts to a maximum of $49,700 for a family of one or up to $76,550 for a family of five.

During the public hearing, Habitat for Humanity board president Tony Losbrock told the council that the project was a great opportunity for the community and one of the most impactful actions the city could take to address rising housing costs. About a dozen other Habitat supporters attended the meeting.

Project name: Summer Meadows. Construction is planned to begin in the spring of 2024.

Contribution map

Tax increment financing is needed to make the project sustainable and feasible, according to Habitat for Humanity. A TIF application is valid for up to 26 years to help offset the cost of infrastructure. Two other residential projects have received TIF in the past – The Trails and The Preserve.

TIF is an economic tool that cities use to develop areas that would not be developed without assistance. With a TIF, taxes on the property are frozen at the current amount for a certain period of time, in this case 26 years because it is a residential district.

The difference between the current tax and the tax after development is used to help pay for some of the project costs. The city benefits from the development of properties that would not otherwise be improved. The value of the property will also rise, increasing the city’s tax base.

The project will receive a TIF note worth $1,078,200. The annual TIF increase available to the developer is $104,000.

The current market value of the property is $212,000. After completing the project, the value will rise to between $12 million and $14 million.

The city is not issuing bonds to help with financing, so there is no impact on the city’s ability to borrow, according to City Manager Marty Schultz.

According to the TIF application, the project addresses the primary finding in the city’s most recent housing study — a lack of new affordable or entry-level home construction.

“That study recommended the city promote the construction of eight to 10 new homes each year,” the request said. “This project will achieve 40% of the city’s stated goal of building 10 homes per year. By building more affordable housing, Habitat will help the Alexandria area grow by creating stable conditions for families to thrive for generations to come.”

The development, according to Habitat for Humanity, will provide affordable housing for area employees in the healthcare, senior care, manufacturing, education and retail sectors.

The homes at Summer Meadows will have two, three and four bedrooms and range in size from 1,000 to 1,400 square feet. Five different home plans will be available with two-stall garages. The house will be at slab level with underfloor heating for improved energy efficiency.

Below are other items from the Nov. 13 meeting that have not been included in other council coverage.

The council agreed to pay Widseth $85,260 to do engineering work on 15 city streets next year that are scheduled to be covered.

Streets on the 2024 list include Hostad Street, Donna Street, South Broadway Street, East 2nd Avenue, Hawthorne Street, Irving Street, Jefferson Street, Kenwood Street, Lake Street, Maple Street, 10th Avenue, 7th Avenue, 9th Avenue, Oak Street and Shoreview engine.

A comprehensive street condition survey presented at the Oct. 9 council meeting is directly related to the project, according to Blaine Green, a civil engineer with Widseth. He said the survey helps develop a five-year overlay plan.

Hostad, Donna and South Broadway are carryovers from last year’s plan, and are scheduled to be overlaid because of their condition and age, more than 25 years old, Green said. The area around Second Avenue East appears more than 20 years old, and heavy traffic use has begun to deteriorate the streets.

Also, if the median business on Third Avenue moves forward as planned, Second Avenue will likely be the designated detour and will see increased traffic. Adding strength now will help prevent it from failing due to this potential increased load, Green said.

Also, slated to be overlaid on 10th Avenue, the project may also address citizen concerns about the catch basins located at the intersection of 10th and Bryant Avenues.

The total budget for the project is $520,000. The engineer’s estimate for the total project is $584,771. As in other years, bids for all streets will be submitted according to separate bidding tables and the award will be adjusted to match the available budget.

This project is included in the city’s capital improvement budget with $320,000 coming from Municipal Aid Maintenance funds and $200,000 coming from the Streets Program Paving Levy as approved in the 2024 preliminary budget.

The board approved two requests for out-of-state travel for firefighters, at the request of Fire Chief Jeff Caro.

Up to four firefighters will attend the FDIC conference in Indianapolis, Indiana, April 25-29. Each firefighter costs about $700. Attendees will experience hands-on training sessions and high-level lectures from national speakers, Caro said. They will also visit vendors to see the latest tools and technologies.

Up to four firefighters will also attend the Firefighting Conference in Aurora, Illinois, July 15-19. The cost per firefighter is about $500, and may be reimbursable, Caro said. The conference’s mission is to provide firefighters with the best hands-on training possible, enforcing a “them first” mentality through faith, family and firefighting skill.

The fire department’s budget has money available for training opportunities, Caro said.

Police Chief Scott Kent gave the council an update on police officers visiting Evansville, Wyoming, to review their body camera system.

The President also provided an update on the Special Olympics International Conference and International Association of Chiefs of Police conference in Chicago, Illinois.

The Council initially approved two amendments to the law:

• Add the airport commission to the city code. When the local code charter was amended several years ago, references to specific city boards and commissions were removed. The Airports Commission was one of them. The Council approved, in a first reading, the addition of the Airports Committee, which consists of at least three members and no more than five members appointed for three-year staggered terms by the Council.
• Amending the section in the city code regarding massage therapy. If the amendment is approved, it will revert to annual license renewal instead of every two years. It would also remove language in city code that is not followed in practice and is deemed unnecessary, such as references to saunas and massage parlors.

The council approved the Alexandria Area Hockey Association’s gambling permit for the sale of raffle tickets at the Hook and Slice bar/restaurant/golf simulator at 2921 Interstate 20 South as a fundraiser.

Hook and Slice will offer an upscale golf simulation experience with a lounge for guests to enjoy brick oven pizza and snacks as well as cocktails, beer and non-alcoholic beverages.

Owned by Matt Geiselhart and his family in Alexandria and Jordan, Hook and Slice is scheduled to open to the public on January 2, 2024. Yagi and his family are from Wahpeton, North Dakota.

Broadway Garden Estates, LLC’s private redevelopment tax increment financing contract has been changed.

In March, the council approved the project’s $25 million TIF application to develop 3509 South Broadway. It is a 130-unit, two-phase residential facility, and 20% of the units will be limited to households with incomes below 50% of the area median income.

The first phase of the project will include the construction of a 50-unit, three-story residential building intended for seniors. The second phase will be an 80-unit building that will be designated for multi-family use.

With a TIF, property taxes are frozen at the current amount for a certain period of time.

INH Properties had requested that this period be 26 years, but the council instead voted for 13 years, which is the period generally allotted to housing projects.

The TIF district has since changed, requiring a new resolution and contract. This includes:

• A new LLC entity was created for the development and the contract was updated to reflect that name.
• Minimum rating added for each building instead of full development.
• Rent restriction requirements have been removed from the contract.
• A change in how observation is implemented has been requested by the developer. The memorandum will now be implemented upon completion of the first building, not both buildings. After the second building is completed, the note will be increased to reflect the value of both buildings.
• The completed construction date has been changed from December 2025 to December 2026 for the entire 130 units.

City Engineer Tim Schoenhoven provided the council with a report from the October 30 Highway Commission meeting:

• The committee recommended the council add “no parking” signs on Hawthorne Street between 17th and 18th Avenues. Hawthorne Street was rebuilt this year between 17th and 18th Avenues, Schoenhoven said. Although the street is planned to not allow parking, people park there across travel lanes, Schoenhoven said.
• The committee discussed parking concerns on Robert Street raised by businessman Todd Jensen. Jensen contacted the city and was told that vehicles were parked along the eastbound sidewalk on Roberts Street in a way that prevented the front parking lot from functioning. He asked the city to paint the sidewalk yellow to prevent such parking. This is a unique situation that the city inherited when the area was annexed, Schoenhoven said. The city would not allow that type of parking today, Schoenhoven said. The committee reviewed the application and determined that people who park on Roberts Street may not be aware of the existence of this front lot. The committee recommended staff contact Ben Zakher, the property owner, and suggest that the city paint a portion of the sidewalk yellow if Zakher agreed to paint the parking stalls along the building. Staff will inform the council later. All the work should be done next year.
• One resident, Shelley Stanek, said she had safety concerns about the 50th Street/Twin Boulevard intersection. Schoenhoven said the Highway Commission is well aware of the traffic issues associated with this intersection. Several options were discussed. The Twin Boulevard realignment was identified in the city’s capital improvement budget as an unfunded priority project with potential funding coming from a Minnesota Department of Transportation program. Staff will continue to seek funding opportunities to address this issue.

The council was introduced to the city’s new Human Resources Director – Kelsey Dilling. She brings experience to the position. She has worked in human resources roles in Alexandria and Cass County industries.

Dilling said she and her husband moved to Alexandria to be closer to their friends and family.

She replaces Karen Tank, who resigned on September 1.