By Tara Mathews
HOWARD LAKE, MNHoward Lake City Council voted in favor of assuming ownership of the fully platted and zoned Terning Trails development, located along 1st Street East in Howard Lake, during its meeting Tuesday.
The property was originally purchased by Lakeland Construction, and was intended for development with affordable, small, first-time-home-buyer-type dwellings.
Following the purchase, market conditions changed, and Lakeland Construction defaulted on its development agreement.
The property was then sold to OP2 Realport LLC., a property holding company.
City staff began researching options for the property, according to City Administrator Nick Haggenmiller.
They determined the city would be able to obtain the property, in order to remedy blight and address the need for affordable housing, after conversations with Wright County staff.
During its meeting Nov. 19, city council discussed the possibility of obtaining the parcels, and decided it would support the action.
According to Haggenmiller, by assuming ownership of the property, the City of Howard Lake hopes to accomplish three primary goals:
• Protect investments already made by the city in the form of satisfying the development agreement, constructing streets, and installing utilities.
• Expand the tax base through the construction of additional single-family homes. This will help the city, school, and county overall.
• Support affordable housing in the community.
“Additionally, we will sell the lots for the cost of assessments, which is anticipated to be as low as a few thousand dollars per parcel. We plan to offer down payment or closing cost assistance, and provide architectural designs that are affordable,” Haggenmiller said.
Currently, a total of $170,000 in delinquent taxes is owed on the property, which would become void if the property is transferred to the city, meaning the school district, county, and city will not recover this tax money.
Wright County staff has determined the properties are free from other encumbrances, such as liens.
The city council voted to deed the property to the state in lieu of forfeiture, and the current owners, OP2 Realport LLC, are cooperating with the state in this process.
City staff will then request to the state that the property be returned to the city.
At that time, the state will turn the deed over to Wright County, and Howard Lake will request a transfer from Wright County to the City of Howard Lake for $1 per lot, for a total cost of $69.
“Throughout this process, the staff and county commissioners of Wright County have been nothing short of phenomenal to work with. We very much appreciate their flexibility and professionalism with this topic,” Haggenmiller stated.
As the last step in the process, the city will apply for the state deed and record it.
If the process is completed, the city will review the parcels to determine outstanding assessments owed to the city.
The city will then begin marketing the properties for the creation of affordable housing under the Building Better Neighborhoods Program.
The city plans to seek funding through Southwest Minnesota Housing Partnership to offer no-interest closing cost loans, which, Haggenmiller suggests, may total up to $50,000, that would be dispersed in the form of ten-$5,000 loans to qualifying families or individuals.
The total financial impact for the city will be approximately $140, including the purchase of the parcels at $69, a one-time state deed fee of $25, and a one-time recording fee of $46.
“Assuming this transfer is successful, we will be seeking individuals, developers, and contractors who are serious about building affordable homes in Howard Lake,” Haggenmiller commented.
Odds and Ends
In other business the council:
• approved completion of community room updates, including a bid from Floor Value of Howard Lake. The total cost of the project is not to exceed $5,000.
• approved the hiring of Heidi Grimmler as a part-time liquor store employee.
• heard the 2013 annual municipal liquor store report from manager Myra Laway. The municipal liquor store showed a profit in the months of April, July, August, September, and October; although for the year there was a total loss of $50,413.
Laway has been implementing new entertainment ideas, new menu ideas, and more event involvement. She plans to continue to implement the Liquor Store Profitability Plan as outlined in 2013.
• rescheduled the council retreat date for Saturday, April 12 at 9 a.m.