ALEXANDRE

— A $15.3 million, 62-unit apartment building project in Alexandria will receive tax assistance.

The council voted to approve a request for major redevelopment tax funding, or TIF, for Park and Third, LLC. The three-story building will be located at the corner of Park Street and Third Avenue, southwest of Northwoods Cafe, on the site of the old Alexandria Concrete.

The six-acre site includes a vacant building and a vacant annex on eight parcels of land.

Because it is a redevelopment TIF and not a housing TIF, there are no requirements to provide affordable housing.

The units will be rented at market rate and will be a combination of one bedroom, one bedroom with a den and two bedrooms. Rent for one-bedroom units is $1,207, while two-bedroom units will have a rent of $1,470.

The project, which will start in 2025 and be completed by December 31, 2026, would occupy 70,000 square meters.

The Alexandria City Council, as the city’s Economic Development Authority, held a public hearing to review the TIF request. Two residents opposed – Catherine Lawton and Byron Peterson.

Lawton, a summer resident, asked the board to table the matter for further review. She said there were a lot of numbers in the TIF application that “didn’t line up.” She said the request did not meet the “but for” requirement, which requires developers to show that a project cannot be done without TIF. She said the evidence in the application was a “very flimsy” justification.

Lawton said TIF amounts to a “free sweep” for developers, while property owners must cover additional city services that additional tenants require. She said it creates a divide in the community between renters and landlords.

Peterson, a Kenwood Street resident, questioned why the seller is not paying for the cost of cleaning up the property from the contamination that was found at the concrete plant site. He said those costs should have been paid for years ago, but will now have to be passed on to taxpayers.

Tim Lundgren, representing Duininck Companies, the developer, said the project would not proceed without the TIF.

“Others have said it’s a free ride, but I think it’s a benefit and an opportunity to remove damaged buildings and contaminated soil,” Lundgren said.

The proposed redevelopment of the site includes:

• Demolition of existing structures.
• Property Contamination Remediation (details below).
• Construction of the multi-family housing block with low garages.
• Construction of a single-storey detached garage with 12 stalls.
• Installation of paved parking surfaces and driving areas, surrounding green space, outdoor patios and associated utilities.
• Two single-family detached houses on the southeast corner of Oak Street and Fourth Avenue.
• A regional stormwater pond will be installed to assist Fourth Avenue and Oak Street, which serve the apartment development and future single-family homes and storage sheds on the southeast side of the property.

In the TIF application, the developer said the additional housing will help continue the “resurgence” in downtown Alexandria. Adding multifamily apartments downtown will help support existing small businesses and encourage new small businesses to invest, the developer added.

As part of the TIF agreement, the TIF redevelopment district would be open for up to 13 years and have a TIF note valued at $959,259.

The city is not issuing bonds to help finance the project. Therefore, there is no impact on the city’s borrowing capacity.

The difference in pre- and post-development property taxes (increase) will be paid to the developer minus 10% administrative costs. Following the district’s decertification, the city will collect all property taxes.

Current annual property taxes are $9,405 and would increase to $117,222 when the project is complete.

Current market value is $795,300. After the project is completed, it will increase to $10.2 million.

The TIF can only be used for land acquisition, demolition, land clearing, utility installation, pollution abatement, rehabilitation and parking, as well as administrative costs.

The city has approved this type of TIF in the past. There are six active redevelopment TIF districts with terms ranging from 13 to 26 years.

The council approved a planned unit development, or PUD, for the project on Aug. 26.

In related action, the board agreed to apply for a Minnesota Department of Employment and Economic Development cleanup grant for the Park and Third site.

The program helps communities pay for the assessment and cleanup of contaminated sites for private or public redevelopment. Grants pay up to 75% of the costs of investigating and cleaning up contaminated sites. Both publicly and privately owned sites with known or suspected soil or groundwater contamination qualify, according to City Administrator Marty Schultz.

Much of the contamination at the site is primarily related to historic concrete batching operations and concrete block manufacturing at the site from 1951-2023.

Contamination refers to oil, hydraulic fluid inside the former block and the destruction of previous structures.

The site has estimated eligible cleanup costs of $1,098,825. The developer would contribute the required 25 percent match of $274,706. No input from the city is required. The city has agreed to act as the legal sponsor of the project under the cleanup grant program.

Are you ready to get into the Christmas spirit?

The Runestone Museum Foundation’s application for a special event permit for ‘Christmas in the Fort and Parade of Trees’ was approved on Monday.

The event, now a holiday tradition, will be held on Friday, Nov. 29, the day after Thanksgiving, from 2 to 6 p.m. It will include carolers, free cider, cookies, coffee, bonfires, a visit from Santa and the lady. . Christmas, decorated trees and more.

Broadway will be closed between Second Avenue and Third Avenue for the holiday.

Between 7,000 and 10,000 participants are expected to attend.

The Board, acting as the Economic Development Authority, approved a request to award a tax increment financing contract for a private redevelopment and related TIF note from Stone Manor SPE, LLC to Stone Manor Capital Investments, LLC.

The request came from Alexandria Area Economic Development Commission Executive Director Nicole Fernholz. The board reviewed the application at its last meeting but wanted more information.

Some information about this TIF district:

LBR Properties, LLC constructed one 63-unit building and one 67-unit building that includes one, two and three bedroom rental units. The lot is located on Arbor Crossing, just east of Alexandria Area High School.

The project was granted a residential TIF district designation in August 2012 as a 13-year district.

In 2016, the note was issued and registered to Pioneer Development, LLC due to a change in the ownership structure of LBR Properties, LLC.

In 2019, Pioneer Development, LLC assigned its interest under the indenture and note to Stone Manor SPE LLC.

Stone Manor SPE LLC is now in the process of selling the buildings and is asking the EDA to assign its interest under the contract and TIF note to Stone Manor Capital Investments LLC, a Minnesota limited liability company.

The Housing TIF District requires 20 percent of the units to be rented by individuals or families at or below the Douglas County median income. This development is required to have 27 units available.

The new owner, Stone Manor Capital Investments, LLC will be required to comply with income and rent restrictions set for the district. For TIF units, rent for a one-bedroom unit will be $870 per month and two-bedroom units will be $955. Market rate rent will be $1,215 for a one bedroom and $1,335 for a two bedroom.

DW Jones is the property manager for the project.

The original note was recorded for $1,291,294 with an interest rate of 5.25%. The note balance is $713,943, with final payment due on December 31, 2029.

Council gave final approval to increase compensation for city and mayor council members by 3 percent.

Right now, the mayor gets $12,649. This will increase to $13,029 in 2025 and $13,420 in 2026. Salaries for council members will change from their current salary of $8,209 to $8,455 in 2025 and $8,709 in 2026.

In addition, the ordinance provides that the mayor and council member shall be compensated $100 for each special meeting or emergency meeting properly called.

The 3 percent increases are in the city’s preliminary 2025 budget.

The council authorized ALP Utilities to solicit construction bids for a distribution improvement project in 2025.

The project will place several power lines underground. Work will be on the Darling Circuit – starting at 401 County Road 22, going north on Arrowwood Drive to County Road 34, then turning right to go east on County Road 34, stopping just before the Marina House .

Estimated bid is $890,000. Bids will be opened on December 11.

ALP Utilities have been running power lines underground instead of on poles for about 15 years. About 83% of the lines are now underground.