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Paynesville Press - August 24, 2005

EDAP board delays decision on four-plex

By Melissa Andrie

Questions about the cash-flow analysis on a proposal to build four rental units in Paynesville have postponed a decision from the Economic Development Authority of Paynesville (EDAP) until at least September.

The EDAP board received the analysis from F & L Management & Development, Inc., the firm that approached the board about building rental units, and reviewed it at a meeting last week. Concerns were raised about whether "numbers were actually accurate" in the $480,000 proposal, according to city administrator Steve Helget.

Originally, the board considered building 16 rental units in four four-plexes, believing a need for upscale apartments existed in Paynesville. This reduced proposal, still to be located in the Wilglo Acres Addition, came about when concerns were raised by local rental property owners that 16 units would be too many for the community's rental market.

At its meeting last month, the board gave preliminary approval to four units in one four-plex: two two-bedroom, one-car garage units; one two-bedroom, two-car garage unit; and one three-bedroom, two-car-garage unit. However, a reassessment of costs with a final expected cash-flow analysis done by the firm needed to come back to the board.

When that analysis was looked at last week, questions were raised about the jump in monthly rents, said Helget. The difference was $75 for the three-bedroom, two-car garage unit (to $925 per month) and $80 for the two types of two-bedroom units (to $755 per month with a one-car garage and to $875 with a two-car garage).

Caretaking costs, though included on the cash-flow analysis as $25 per unit per month, were not reduced from the original proposal, which Helget noted as another concern. The new proposal lists them as $4,800 per year, just as the first proposal did, when they should be $1,200 per year by that cost.

Another change in the analysis was a reduction in the estimated vacancy rate from eight percent to five percent.

With no representative from F & L Management & Development, Inc. at the meeting - on Tuesday, Aug. 16 - to answer questions, the EDAP board delayed its final approval. The board - which includes Press publisher Peter Jacobson - will continue its discussion of the project and possibly make a decision at its next meeting, at 5:30 p.m. on Tuesday, Sept. 20.

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