City council to consider loan for new apartment building

Among the items on the agenda for Monday’s Worthington City Council meeting is consideration of a loan that would help in the construction of a 49-unit residential apartment building.

The Community Asset Development Group is requesting assistance in the form of a loan for the apartment building, which would be on a Worthington Economic Development Authority-owned parcel just south of the New Grand Theater. In addition to 49 one- and two-bedroom units, there would be 29 garages. Thirty-nine units shall be market rate, and at least 10 of the units shall be occupied or available for occupancy by persons whose income do not exceed 50% of the Nobles County Area Median Income.

The terms of the requested loan are $700,000 at 3.0% interest, with interest-only payments for 10 years and repayment of the principal due at the end of 120 months. The price of the parcel is $107,000 and has outstanding estimated assessments of $24,019.99.

The developers are also requesting formation of a pay-as-you-go 26-year Housing Tax Increment District. The city would issue a note to the developer in the amount of $578,944 – a 2021 figure that may be updated based on current costs -- at a rate of 4.0%. The purpose of the note is to reimburse the developer for qualified costs, which are generally limited to site development, and comply with the statutory TIF Act. The city would pay the developer 90% of the tax increment received from the project each year in two payments generally on Aug. 1 and Feb. 1 for a period of up to 26 years. The city would require the developer to pay 100% of the costs associated with establishing the TIF District including legal, financial consultant and administrative fees.

In a separate matter, the council is expected to hear a presentation from Joshua Schuetz, project manager for Community and Economic Development Associates, on the organization’s efforts, plans and timelines regarding the potential development of childcare facilities in the area based on a needs assessment that was performed on behalf of the city.