EDA approves planning grant

By FRITZ BUSCH

Journal Staff Writer

NEW ULM -- In an effort to spur development of more affordable housing, the New Ulm Economic Development Authority unanimously approved on Tuesday the allocation of $500 for a matching Community Planning Grant with the Southwest Minnesota Housing Partnership.

The EDA will seek endorsement by New Ulm City Council at its Nov. 16 meeting.

New Ulm Economic Development Coordinator Brian Tohal said more housing is "very much a positive that keeps people in town and lures new companies."

The alignment greases the skids for creation of housing projects geared for first-time home buyers that are often renting housing but seek to own their own home.

Since its creation in 1992, the SWMHP has constructed, developed and rehabilitated more than 4,000 units and invested more than $150 million in the region.

Community loan programs include affordability gap loans, entry cost assistance, working with local lenders to introduce affordable first mortgages, and facilitating partnership loans between local lenders and Rural Development under the Rural Home Loan Partnership.

Last week, New Ulm civic leaders, realtors, bankers and landowners rode a coach bus to visit affordable housing projects in Nicollet and St. Peter.

They learned that both projects were geared to attract families with children to boost school enrollment and provide affordable housing to employers.

The City of Nicollet bought land and developed lots using Tax Increment Financing to reduce assessment costs and lot costs by $7,000 each. Lots were sold for no more than $12,000 including assessments on narrow roads without alleys.

Eight homes were built for $118,000 to $124,000 with unfinished expansion space and zero interest loans with help from the EDA and local donations.

St. Peter project lot costs were reduced by $10,000 each with TIF, roads 34 feet wide, 60 feet lot frontage, no front-loaded garages, with alleys and sidewalks, a park, walking trail and open space.

Home costs ranged from $108,000 to $124,500 with GMHF low-interest loans, city down-payment assistance grants, and no-interest MHFA second mortgages.

The project spurred development of nearby larger homes, Tohal said.

School Dist. 88 owns large amounts of land on the hilltop that could be used for housing projects, Schultz noted.

A community planning session with the EDA, city council, school board, Minnesota Housing Partnership and other agencies was suggested by Tohal.

Richard Salvati recommended the EDA invite school board members to attend the next council meeting when the housing project concept is explained.

The EDA:

* Approved new Public Housing program ceiling/flat rents based on a 4.3 percent increase above Brown County Fair Market Rent of $432 for 1 bedroom; $518, 2-bedroom; $621, 3-bedroom; and $638, 4-bedroom.

* Learned that the EDA's investment operating pool is $589,608

* A $25,000 new EDA Commercial Property Rehabilitation Loan was made to JRJN, Inc. dba "The Main Ingredient," 209 N. Minnesota.

* St. Michael's Apartments are full. Eight are on the 1-bedroom waiting list with one application pending and one is on the 2-bedroom waiting list.

* Garden Terrace 1 Apartments have a $1,369 cash surplus and Garden Terrace 2 Apartments $857.

(Fritz Busch can be e-mailed at fbusch@nujournal.com).