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Granite Works site considered for income-based housing
April 3, 2017


DELANO, MN – For years, the former Granite Works site on River Street has been identified as a redevelopment site. Over the past year, Ron Clark Construction has been approaching the city about the possibility of creating at least 49 units of income-based housing on the site.

Delano City Council learned more about the proposal and the company’s requests regarding the site during a Tuesday evening work session meeting.

This development is contingent upon Clark obtaining Minnesota Housing Finance Authority tax credit approval, with that decision expected in the fall.

Clark is proposing a three-phased project, beginning with about a $12 million investment in a 49-unit, three story building with underground parking on the west end of the property. Phase two would include a 60-unit building about three years after phase one. Clark representative Mike Waldo did not elaborate on plans for the third phase, which could take the place of the existing office building and warehouse.

“One word you won’t hear me say is simple,” Waldo said. He noted there are 17 buildings on the property.
An environmental audit would need to be completed before proceeding, and Clark has requested for the city to pick up the $30,000 tab initially.

“Funding we would provide as part of this would be secured,” City Administrator Phil Kern said. “Essentially, we would be promised a repayment of that in one of two methods. The first would be if all of this gets approved and everyone decides to proceed ahead, we would be made whole and receive that $30,000 at the time they purchase the property from BBS . . . If things do not proceed, and the project does not go forward, BBS gains the benefit of having this work done . . . so BBS would allow us to assess this against their property.”

Clark is requesting that the site be designated a tax increment financing district, which would allow the city to capture up to 25 years of tax increment generated by the increased value of the property. Clark would be requesting a significant portion of the increment to be reinvested on a pay-as-you-go basis over time to offset upfront borrowing and to pay for development costs. This has been done for Delano Commons and Legacy of Delano.

Another request is for the sewer availability charge and water availability charge to be deferred, possibly up to 30 years. This would be similar to a 2003 agreement with Gateway Village, which will pay $190,000 in fees and interest Jan. 1, 2022.

Delano Water, Light, and Power Commission would have to sign off on such an agreement.

A final stipulation would be for the city to carry the cost of the land for phase two until Clark is prepared to develop it.

“It seems like we’re asking for a lot, and honestly we are,” Waldo said. “Because it’s a redevelopment site, normally we say, ‘You guys clean it up and then we’ll buy it.’ . . . We feel strongly about moving forward, but as part of that, we don’t want to hold the land until we know we have a project.”

City Planner Alan Brixius said the city would like to see the flood plain map amended so the property is outside of the 100-year flood plain.

The council will consider the request for the environmental audit loan during its April 4 or 18 meeting. A planning commission public hearing is tentatively scheduled for May 30, and the council would decide on the other conditions of the development after that date.

During Tuesday’s meeting, council members were given an idea of what the development would look like and cost for tenants.
Waldo showed pictures of properties in Savage, New Hope, and Carver. He will also provide a tour of any or all of those properties Saturday, April 22.

All units have wifi and are smoke-free and pet-free, though service animals are allowed.

Projected rents, including utilities, will be $805 per month for a one-bedroom unit, $996 per month for a two-bedroom unit, and $1,115 per month for a three-bedroom unit.

In 2016, qualifying incomes ranged from at or below $36,060 for a family of one to $59,760 for a family of six. Updated information is expected within a week or two, Waldo said.

Splash pad
A splash pad could be installed as soon as this summer, but first a number of questions need to be answered.

What is the cost?

It is estimated to be between $500,000 and $600,000, though Landscape Structures has proposed donating all the above-ground equipment, which would cut the cost in half.

The proposed splash pad would feature a recirculation system that treats, warms, and reuses water.

“The system is more expensive, but the operation is less costly because you’re not wasting water,” Kern said after the meeting.

How would the city fund its portion?

The council had previously removed splash pad funds from the 2017 budget. Kern said council members have since made it clear that no general fund or taxpayer-funded dollars be used for the splash pad.

“We have a profitable liquor store with a reserve of $600,000,” Kern said. “If this goes ahead, they want staff to look at using liquor store funds to pay for it.”

That would be consistent with liquor store-funded projects in the past, such as Big Rock Park and the city’s portion of new bathrooms at Central Park, which is also the likeliest location for a splash pad.

What if any staffing would be required?

Would the splash pad need to be fenced?

Staff will have a few weeks to research these questions, as the topic will likely return for council consideration during the Tuesday, April 18, meeting.

Downtown parking lot
Councilwoman Holly Schrupp proposed that the center island in the downtown parking lot contain a rain garden.

Assistant City Engineer Shawn Louwagie said a rain garden there would be at capacity with a quarter inch of rain.

“If it doesn’t have capacity, there’s a higher level of maintenance with it,” Louwagie said. “ . . . With the amount of drainage to the center island, it wouldn’t be effective.”

Proposed plans called for landscaping around a light and around a honey locust. A transformer will also be moved from the alley to the location.

Schrupp asked about the large amount of concrete, and Louwagie said it could be reduced. He also said that the vegetation included in the island could be changed.

Schrupp and Councilwoman Betsy Stolfa will work together on a plan to incorporate as much vegetation into the island as possible.

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