City receives $150K grant, will work with developer on project

Published 9:54 pm Monday, June 11, 2018

The city of Albert Lea has received a $150,000 forgivable loan from Minnesota Housing to help develop the former Ramsey School building.

The Albert Lea City Council on Monday unanimously permitted the loan with developer Schoolhouse LLC.

The city applied for the Workforce Housing Development Program deferred loan funding to help fill the funding gap for the project.

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“The funds will be used to turn the building into 12 market rate units that preserve the original historic character,” said Albert Lea City Manager Chad Adams in a report.

Schoolhouse purchased the property in 2016 and plans to build 12 units on the building’s first and second floors in the first phase of the project. An additional approximately 17 units were initially planned to be built in the second phase, and an addition to the building was planned to accommodate second-phase development.

The city plans to contribute $75,000 for the development, with an investment of $800,000 to $1.2 million by the developer.

“All of the housing studies that we have had in the past have really shown us that we were lacking in market rate rentals, and this is one of those ways that we’re trying to look at innovative ways to try to really bring back that sector of housing to our community,” said Albert Lea Mayor Vern Rasmussen Jr. after the meeting.

Under a best-case scenario, the building could be occupied late this fall.

Rasmussen said developing the building “definitely helps” the city as it attempts to address its shortage of market place rental housing.

“It’s kind of the creative ways that we’ve really been looking at trying to make sure that we have the housing that’s needed in our community,” he said. “And we’ll continue to look at these opportunities throughout all different avenues and every type of housing that we’re really lacking.”

According to city documents, what remains of the building was built in 1967. The Albert Lea school district used it in the 1990s for community education programs, but the building has been vacant for several years.

The building has not been used as a school since 1980.

After the meeting, 1st Ward Councilor Rich Murray said, “It’s important that we get some more housing in this community, and so this is doing that.”

The $150,000 deferred loan will have a zero percent interest rate and will be forgiven after three years.

In other action, the council:

  • Awarded the sale of $2.5 million in general obligation improvement bonds to finance 2018 city improvement projects.
  • Approved a Minnesota Department of Transportation grant for the replacement of a jet fuel cabinet at Albert Lea Airport. Under the approximately $60,000 grant, 70 percent of funding could be from the state and 30 percent would be from the city. The cabinet was damaged in April and is inoperable.
  • Accepted a $11,500 grant from Southeast Service Cooperative, an organization that offers assistance and wellness grants to members. Grant funding represents the cooperative’s wellness funding support for 2016 programming.
  • Authorized placing message boards at the Minnesota Highway 13 boat ramp and the Brookside boat ramp. The boards are meant to post Fountain Lake dredging information for users of the lake. The updates are expected to include hazard information and general information on project progress and the location of the work area. 
  • Agreed to not waive monetary limits on tort liability.
    “If the city does not waive the statutory tort limits, an individual claimant would be able to recover no more than $500,000 on any claim to which the statutory limits apply,” Adams said. “If the city waives the statutory limits and does not purchase excess liability coverage, a single claimant could potentially recover up to $1.5 million on a single occurrence.” 

About Sam Wilmes

Sam Wilmes covers crime, courts and government for the Albert Lea Tribune.

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