City-owned

apartments

generate

small surplus

Garden Terrace

has waiting list

By CHRIS VETTER

Journal Staff Writer

NEW ULM -- City-owned apartments are filled to capacity, creating a small surplus for 2000, according to city documents released Tuesday.

Gary Gleisner, city finance director, told the New Ulm Economic Development Authority that the city netted a $6,000 surplus from the two Garden Terrace sites for the year.

The apartments have actually been more profitable than an initial glance at the small surplus. The city expected to net a $12,170 profit from the 51-unit Garden Terrace I, along with an anticipated $45,700 deficit for the 37-unit Garden Terrace II.

However, both buildings "overperformed" for 2000, Gleisner said. The city raked in a $37,433 profit for Garden Terrace I while deficits at Garden Terrace II were $31,880 for the year.

The documents show the city expected to lose $33,000 on the complexes last year, not produce a surplus.

"They've performed very well," Gleisner said. "They've really fit a public need."

The solid budget numbers are due to 100 percent occupancy in the 88 units, Gleisner said. There are 63 people on the waiting list to get an apartment in Garden Terrace, city officials said.

Garden Terrace II is about the same size as Garden Terrace I, but has fewer apartments, Gleisner explained. Thus, it does not generate as much revenue as Garden Terrace I despite having larger living quarters, he explained.

Dave Schnobrich, city planning and development coordinator, said the December utility bills at Garden Terrace topped $4,000, an all-time high for the apartment complexes.

"I don't even want to see what January's bills are," Schnobrich joked.

Gleisner asked if the city can raise rents to offset the rising utility bills. Schnobrich said the city legally could raise rents for tenants that have lived there longer than one year.

"I would hope we wouldn't have to do that," Schnobrich said. "If we have to raise rents, I would hope it will wait until the end of this year."

Garden Terrace apartments range in price from $510 to $705, depending on number of bedrooms, size of the apartment, and access to underground garage parking, according to city pamphlets.

Gleisner estimates that the city will move forward on building a third complex within three years, after some of the current apartment debt is paid.

"The demand is out there," he said.

It is difficult to gauge how long a person could sit on a waiting list before being accepted for a housing unit, Schnobrich said in a recent interview.

"Sometimes we have a lot of turnover, other times we have several months with no turnover," he said. "It varies."

The city pays about $172,000 annually on interest and debt service for Garden Terrace I, and another $175,000 annually for Garden Terrace II.

For the year, Garden Terrace I generated $375,000 in revenue, with more than $340,000 of that amount coming from rental income. Likewise, Garden Terrace II had total revenue exceeding $290,000 for 2000.

Garden Terrace I, which is closer to Garden Street, opened in 1994. Garden Terrace II was later built in 1997. Both complexes were financed with city bonds.

Besides the Garden Terrace sites, the city also owns the Broadway Haus -- a 40-unit complex aimed at low-income seniors -- and 10 family homes. The 2000 financial reports for those properties were not discussed at the meeting.