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|Paynesville Press - June 29, 2005|
EDAP considering rental housing units
In an effort to provide rental housing for entry-level professionals, the Economic Development Authority of Paynesville (EDAP) is considering building 16 rental units, targeted for mid-incomes in Paynesville.|
EDAP will hold a public hearing on the proposed housing project on Wednesday, July 6, at 5:30 p.m.
The city of Paynesville will also hold a public hearing on Wednesday, June 29, at 6:30 p.m. to consider granting Housing and Redeveloping Authority (HRA) to EDAP. As formed, EDAP did not specifically hold these powers.
EDAP is considering building 16 new rental units - four four-plex units - in the WilGlo Acres Addition. As currently designed, the single-floor four-plex units will include eight two-bedroom apartments (with one-stall garages), four two-bedroom apartments (with two-stall garages), and four three-bedroom apartments (with two-stall garages).
The rental units would be targeted as transitional housing for new Paynesville residents and as permanent housing for area seniors who want to pare down, said Tom Serie of F&L Management and Develop-ment, Inc., the firm acting as consultants to EDAP for the project.
The units would be large and each could be easily modified to be handicap accessible, according to city administrator Steve Helget, who has seen similar units Serie's company has built in other communities, including Eden Valley, Watkins, and Benson.
Rent for these units would not be subsidized and could range from $675 to $800 per month. The actual rents would be determined once the project is completed, said Serie.
Building costs, estimated at $1.86 million, would be covered by essential function bonds, which the state allows to be used for housing projects either by economic development boards and housing and re-development authorities. These tax-free bonds would be repaid by EDAP through rental income.
EDAP would need to hire someone or some company to manage the rental units.
EDAP was approached by Serie several times in the past regarding building rental units but didn't begin seriously to consider building them until last year. After building similar units in nearby communities, Serie believed there was a need for rental housing in the Paynesville area and EDAP agreed.
EDAP, which was formed in the mid-1980s, started with an emphasis on bringing businesses and jobs to Paynesville but, in recent years, has added supporting existing businesses by addressing their needs for employees. A shortage of affordable housing and quality rental units has been identified as a key limiting factor in attracting and keeping employees.
According to Helget, EDAP members recognize that building rental housing in the area could be an asset to the community. During an informal survey of rental housing a few years ago, city officials learned that all of the rental units in Paynesville were full. EDAP is currently doing a formal survey about the rental situation in Paynesville.
Building new rental housing could keep people in the community and possibly attract new jobs to the area if employers know there will be enough housing to fulfill their employees' needs, said Helget. In addition, additional rental housing could attract commuters from other areas to Paynesville, an added economic boost, according to Helget.
The city's only responsibility would be to sign an operations and maintenance deficit agreement, required for the bond. Essentially, the city would agree to provide maintenance and insurance for the units if they don't make enough income to cover costs, said Serie. His company, he stressed, has built nearly 1,000 of these rental units, and none have ever required any assistance from the city involved, he added.
F&L Management already has a purchase agreement to buy five lots in the WilGlo Acres Addition for this project. After the public hearing, the EDAP board could approve the project and begin to secure financing. Time is of the essence, said Serie, as interest rates are still low but could go up any time.
Serie hopes to start accepting bids by late July or early August with the units to be completed next summer.
If pursued and successful, this rental housing project eventually could be expanded. EDAP also would likely sell the units to a private party once the mortgage has been paid down, added Serie.
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