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March 22, 2000
City Council OKs plat for Diocese propertyCouncil, PUC approve sale of $8 million in bonds to fund new generatorBy KREMENA TODOROVA Journal Staff Writer NEW ULM -- The City Council Tuesday approved a preliminary plat for a new subdivision, despite councilors' concerns about the absence of alleys and the affordability of lots. The property in question, bounded by 5th North Street, North Highland Avenue, 8th North Street and the Way of the Cross, is proposed for development by its owner, the Diocese of New Ulm. The proposed development, on an area of 8-9 acres, is the first stage of long-term development plans currently being drafted by the Diocese, which owns some 100 acres in the area. The preliminary plat divides the property into 34 lots. Thirty of the lots are intended for single-family housing, two for multi-family housing and two are developed properties (the Diocese of New Ulm and the Way of the Cross). According to the plat, the majority of the single-family lots are 86 by 130 feet in size. According to Dave Maroney of Community Partners, Inc., a firm consulting the Diocese on the project, the multiple-family units, located on a bluff overlooking the city, would most likely consist of "upscale" townhouses or condominiums. The preliminary plat does not provide for alleys in the new subdivision, regulating utility access with easements instead. This is in part dictated by topography (the property is bordered by a bluff on the east side) and a need to "maximize the use of the land," said Diocese representative Shaun Sommerer. City Council members, however, voiced a preference for incorporating alleys in the development. "I feel alleys would provide more options," said Council President Dan Beranek, citing possibilities for building garages and multiple vehicle parking. "To me, alleys would be preferential," said Councilor Ron Fleischmann. "They would carry over the general theme of downtown, make it clear we are looking at the same community." Other council members observed that the lots, larger than lots in the traditional city grid, may not accommodate "affordable" housing, catering to the upper end of the market instead. "I don't mean to be a wet blanket, but I wonder if the original thought (to develop affordable housing) is being achieved," Councilor Joel Albrecht said. Despite a consensus on these concerns, however, the Council gave the plan the green light, citing a chronic housing shortage in the city and a need to make utility construction decisions as soon as possible. "I am not in favor of delaying this," said Albrecht. "I'd move approval just to move things forward." City Manager Richard Salvati stressed that plan is coupled with the city's utility construction program for 2000: the sooner the decisions are made, the better the utility contracts would be. Sommerer, the Diocese official, said the Council's concerns would be addressed by the Diocese committee in charge of the project. "I can't really guess which way the committee will go," Sommerer said. * In another matter, the City Council approved the issue of some $8 million in bonds, to fund the addition of a generator to the municipal electric system. The Public Utilities Commission approved the project earlier in the day, at a special meeting. According to PUC officials, the second-hand, 25-megawatt generator will eliminate a need to lease extra generating capacity at peak times. It will help maintain the city's generation capacity at a required 115 percent of its actual needs. Currently New Ulm leases about 12-13 megawatts a year to meet this target. PUC engineers say the plan will stabilize electric supply, making the city less dependent on unpredictable peaktime capacity pricing and transmission interruptions. The plan will eliminate the problem of finding available electricity and transmission capacity -- a concern which result from a shortage of generating facilities in the region, says Utilities Director Bob Stevenson. PUC officials also stress the potential to generate extra revenue, by selling excess electricity to hard-up utilities in the region. The bonds to fund the project will be 14-year tax-exempt bonds, said city financial consultant Jeanne Fredrick Vanda. The cost of the project will be offset by "demand cost savings," if present market trends persists, said Vanda. Utilities Planning and Development Engineer Dan Sonnek has described the proposal as "rate-neutral". This means that over the anticipated life of the bonds debt-service costs would equal the price of leasing capacity. The estimate is based on rapidly escalating lease costs - which have been rising at 25 percent a year, and a strong likelihood the trend will persist, according to Sonnek.
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