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Council authorizes city application for SWMHP project

The Worthington City Council authorized the city to complete a Workforce Housing Development Program Grant application on behalf of a planned Southwest Minnesota Housing Partnership project.


Terms of the housing partnership’s request for the proposed project include:

* Acquisition for $1 for the 1.79-acre parcel, valued at $58,175;

Five-year property tax abatement from the city, Nobles County and District 518, which is estimated to be approximately $404,000 based on an estimated taxable market value of $6,580,000;

* Roadway and utility infrastructure investments by the city of $213,077 for Grand Avenue and Darling Drive abutting the parcel, without which development of the parcel would not be feasible;

* A grant from the city in the amount of $250,000.00 from spending plan funds, and; * A 10-year loan in the amount of $1,000,000 at 2.0% interest, amortized at 30 years.


This proposed market rate residential rental project would be developed on a city-owned 1.79-acre lot at Grand Avenue and Darling Drive, just south of the New Grand movie theater. At least $1 of local matching funds for every $2 of program funding is required; the city's $2,034,568 contribution exceeds the 2 to 1 local share requirement.


The project consists of 10 market rate rental twin homes with attached garages for a total of 20 new residential units. Each unit is two levels with two-bedrooms and one and a half bath.

 

Also Monday, the council approved the adoption of a commercial and industrial tax abatement program.


The program will provide abatement of the city’s share of property taxes for five years, starting with 100% the first year and 20% less each subsequent year. Council members approved the program with an amendment stating that work on the project must begin within 12 months of a required development agreement between the city and the applicant/business/developer.


Additionally, the council approved Task Order 27, which provides engineering service for project development for Service Drive and Service Road work along Oxford Street. The state previously awarded the city of Worthington $1,440,400 in Local Road Improvement Program funds for this work. The project scope includes reconstruction of Service Road, extension of Service Drive to tie to Minnesota 60 and reconstruction of utilities.


The funds from the state do not cover the engineering service fee, right of way acquisition or utility reconstruction. The cost for Task Order 27 – which contracts with the engineering firm Bolton and Menk -- is not to exceed $167,500.


The council also met in closed session Monday evening to discuss a legal matter. The city had previously submitted a final pay application to Larson Crane Service including 40 days worth of liquidated damages totaling $48,000 pertaining to the recent Eighth Avenue reconstruction project. The city now plans to go back to Larson Crane to see if it will accept an amended amount of $24,000. It was stated during the Dec. 26, 2023, council meeting that the delay in completion of Eighth Avenue work resulted in an extra cost of approximately $131,000 to the city.


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