Council approves abatement for Ramsey School project

Published 10:08 pm Monday, June 25, 2018

The city of Albert Lea approved two resolutions Monday night that will assist in the development of the former Ramsey School building.

The council approved a tax abatement agreement with Schoolhouse LLC, the developer of the project, as well as an agreement for a loan to the company from the city’s workforce housing development and economic development fund.

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Schoolhouse purchased the property 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.

After the meeting, Albert Lea Ward 3 Councilor Jason Howland said the development addresses the community’s lack of housing.

“Housing is an issue,” he said. “It’s an ongoing issue in the city, and so anytime we can get the type of market rate rental housing in the city is a good thing, and that’s why the city is investing in developers who are coming up with plans like this.”

Schoolhouse is expected to make a project investment of $800,000 to $1.2 million.

The city is proposing retaining tax abatements of up to $75,000 for 10 years for the project. It was required to match $75,000 after the state awarded a $150,000 workforce housing grant for the project.

The Albert Lea school district and Freeborn County are reportedly being approached to retain tax abatement for the project.

“Each taxing jurisdiction would be abating approximately 75 percent of new taxes on the property over the next 10 years rather than 100 percent,” said Albert Lea City Manager Chad Adams in a report, noting 85 percent of taxes were abated for Wedgewood market rate rental apartments a few years ago.

“Staff is seeking to either advance the $75,000 from our economic development fund, to be reimbursed by tax abatement; or to rebate the developer through tax development; or to rebate the developer through tax abatement on a pay-as-you-go basis for the next 10 years for taxes paid,” he said.

The city approved the loan from its workforce development fund to Schoolhouse after the company applied.

After the meeting, 4th Ward Councilor Reid Olson deemed it “very important” for the city to increase its stock of market rate housing, noting the project increases the tax base for a formerly vacant building.

“That’s always a good thing,” he said.

“It’s housing that we need and it delivers us tax base.”

Construction on the complex needs to start within 12 months of loan acceptance, and the project must be complete no later than 24 months after construction starts.

In other action, the council:

Permitted an agreement for two $50,000 loans with Jensen Excavating and Trucking LLC. from the city’s economic development fund program.

The first loan is expected to pay for retention of the existing business and to create tax base. The second loan is expected to be forgiven based on the creation of five new private sector jobs within three years.

“The fund is used, among other things, to create and retain good jobs, leverage private investment and increase the local tax base,” Adams said.

Accepted a $600 donation from Amber Brandt for the planting of two trees at Fountain Lake Park in memory of Vern Roberts and a $25 donation to the Senior Center.

Approved amending an Albert Lea Fire Department mutual aid agreement so multiple agencies can be notified at once of an emergency. The agreement is expected to improve first responder response times.

Amended the fee schedule to reflect an increase in the annual off-sale liquor license fee to $450.

Authorized an agreement with Albert Lea Furniture Inc. and Albert Lea Commercial Renters LLC. for up to $10,000 in matching grant funding for facade restoration under the South Broadway urban renewal grant fund. Adam Janisch of Albert Lea Furniture, under the Slumberland Furniture name, is renting a building at 822 S. Broadway Ave. owned by Al Larson of Albert Lea Commercial Renters.

The fund is intended to assist property owners in making site and facade improvements that “preserve the architectural character of the property and improve the curbside appeal for the South Broadway corridor,” Adams said.

Accepted a One Watershed One Plan memorandum of agreement with the Shell Rock River Watershed District. The council provided a resolution of support for the plan last month. The plan aims to combine and consolidate water plans into one.

Authorized an easement purchase for future roadway and utility purposes at 21362 775th Ave. for $16,000.

“In late 2017, the city of Albert Lea was approached by the owners of property located at 21362 775th Ave. to see if there was interest in purchasing a roadway and utility easement,” Adams said. “The roadway is a dead end, and the city had used this property as a temporary roadway when 770th and 775th Avenue were being constructed.”

Authorized action on tax-forfeited properties.

“The city and the county reviewed the tax and assessment balances on the new and prior tax-forfeited properties,” Adams said. “In order to clarify the sale of these properties by the county in September, after reviewing the property values, the sales prices were set to include all or a portion of the outstanding assessments.

“In the past, sales of the properties were confusing, as the purchaser would have to call the city to verify the amount of assessments and if these amounts could be lowered in the future if the prospective buyer was interested in the property.”

The city will receive initial outstanding assessments from sale proceeds, and the remaining balance is expected to go to Freeborn County to cover delinquent taxes.

The city is requesting a six-month hold on the property at 625 W. Main St.

“There are a number of Tiger Hills lots that remain owned by the state of Minnesota; prior and current year forfeitures,” Adams said. “In order to increase interest in these properties, staff is proposing that the sales price be set at $3,000.”

That amount is expected to be deducted from the assessment balance, and the remaining assessment balance will be assessed over five years at 2 percent interest.

About Sam Wilmes

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

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