Block 25 TIF for Willmar City Council Approved Downtown Apartments Project
The plan will reimburse a portion of the company’s property taxes on the project, which can be used to pay for eligible development costs such as land acquisition, building demolition, and environmental restoration.
The tax increase funding district will last for 15 years, during which time Lumber One is expected to be paid back $ 1,075,722, or approximately $ 47,000 for the first year and $ 73,000 per year for years 2 to 15. .
Lumber One will continue to pay all current property taxes on the land. The reimbursement comes from the new tax value added by the development project.
The council approved the district and the plan to fund the tax increases unanimously, with Councilor Audrey Nelsen abstaining as her family at one point owned and operated a business on the land in question. Councilor Tom Butterfield was absent from the vote. There was no public comment during a hearing before the vote.
Block 25 is located between Second and Third Streets Southwest, bordered by US Highway 12 and Benson Avenue. The block is located in the Willmar Renaissance Zone, an economic development district created in 2020 by the city.
Project developers in the area could be eligible for a host of incentives, including free building permits and utility hook-ups, virtually free city-owned properties, and tax increase funding. Block 25 Lofts is the first approved project for the area.
Concept art for Block 25 Lofts in downtown Willmar. Art by JLG Architects.
The project will see the construction of a market-priced four-storey apartment complex with 58 units, as well as underground and above-ground parking for residents. The total value of the project is estimated at $ 10 million.
The city owned the western half of the block, while an individual owned the east. Both were sold to Lumber One in the spring. The city-owned land was sold to the developer for $ 1 per plot, or $ 4 in total.
While Lumber One was aware of the environmental issues with the property – a dry cleaner was installed there – recently other issues were discovered including traces of oil in the boreholes in the ground under the public parking lot on the west side. of the block.
The company decided to do a Phase 1 and Phase 2 environmental assessment to find out the problems and develop a plan on how to correct them. The remediation could cost Lumber One hundreds of thousands of dollars. Funds from the tax increase financing plan can be used to pay for these costs.
While using tax increase funding for a housing development is something the city has only done in recent years, the feeling within council was that the Block 25 project is a good candidate for it. This is all the more true as the development cleans up and develops difficult terrain in the city center.
“I think this is a good project for downtown Willmar,” said Councilor Rick Fagerlie. “I’m glad a developer came and built a four-story apartment building.”