Assistance for rental housing project on council agenda

Among the items on the agenda for tonight's Worthington City Council meeting is consideration of an offer of financial assistance to DeRocher Brothers Construction of LeMars, Iowa for the development of market rate multi-family rental housing.

Council members approved in December the issuance a right of first refusal to DeRocher Brothers Construction for the acquisition of Lot 1, Block 2 in the Cecilee Addition for the purpose of developing market rate multi-family housing. The right of first refusal extends to April 30. DeRocher's proposed development includes up to five 12-unit apartment buildings likely to be constructed in phases as necessitated by rental demand. 

Financial assistance to be considered tonight by the council includes:

The sale of the Cecilee Addition parcel from the Economic Development Authority (EDA) to DeRocher for a purchase price of $107,000 financed by the EDA in accordance with a 20-year Contract for Deed, as well as an agreement in which the EDA forgives each and every payment due under the Contract for Deed on a monthly basis so long as the developer abides by the agreed upon terms including the Contract for Deed, Development Agreement and any other agreements presented.

The providing of financial incentives of $15,000 per apartment unit up to a maximum of 36 units is also included in the assistance. The financial incentives, up to a maximum of $540,000, are to be paid on a prorated basis upon issuance of individual building certificates of occupancy. 

Sources for the incentives and others include unallocated Spending Plan funds ($256,903) and Minnesota Statewide Affordable Housing Aid funds received through 2025 ($131,082).