The Blaine City Council has the luxury of choosing between three vastly different housing proposals on a property the city does not even own.
Three separate brick office buildings constructed in the late 1970s at the northeast corner of University Avenue and 102nd Lane are at the point where redevelopment of the property to a new use or reinvestment in the buildings should happen, Blaine Planning and Community Development Director Bryan Schafer said.
The council had three choices: 32 townhomes in an association-managed neighborhood, 60 market-rate apartments or an 118-unit apartment building for senior citizens only.
Schafer said this was the first time in his 30 years where three different developers made a pitch to the council for the same property.
“It’s up to city say which way they want us to go,” said Rodney Lee, who is one of the property owners.
Two of the office buildings are owned by ProGrowth Bank and one building is owned by Blaine University Partners LLC.
The council said it liked the townhome concept the most because it has the least impact to the surrounding neighborhood.
Lee, who is involved with Blaine University Partners and is also the listing agent for the two bank-owned buildings, said this is far from a done deal though and the office buildings are still open for business.
The Blaine Economic Development Authority will still need to approve $850,000 in Tax Increment Financing assistance and the council will have to approve a property rezoning and plat.
“We’re still a long ways to go on this project,” Lee said
CommonBond Communities approached the city in February 2016 to gauge the council’s interest in a three-story, 50-unit apartment building for lower-income tenants.
Mike Bourke, who was on the City Council at the time, lives in the neighborhood east of this property. He stated a belief that his neighbors would have been opposed to the project partially because of the visual impact of having a taller building next door. His preference was to not rezone the property from an office to a residential use.
After receiving lukewarm interest, CommonBond stepped aside and never proceeded with a development, so a public hearing to gather neighborhood testimony did not happen. This will happen eventually because any of these new residential developments would have needed to have the council approve a property rezoning and this triggers a public hearing.
Since CommonBond was turned away by the city in February 2016, two new people have joined the council. Voters chose Julie Jeppson over Bourke. Andy Garvais was chosen to replace Russ Herbst, who did not run for re-election.
After receiving a presentation from three different housing developers, the majority of the council said it liked the 32-townhome option the most.
Jeppson and Dave Clark, the Ward 2 council member representatives for this area of Blaine, said the townhome option makes the most sense because it adds the least amount of traffic.
“My concern is the traffic,” Jeppson said.
Another favorable factor in Clark’s opinion is the townhomes would be shorter than either apartment building proposal. Clark said the apartment buildings would “stick out like a sore thumb.”
CommonBond had asked for a public subsidy of $625,000 to pay for demolition of the three office buildings and cover any environmental cleanup costs such as excavating and replacing old soils with higher-quality fill.
All three housing developers were asking for help from the city, which would come in the form of tax increment financing. The concept of TIF districts is redevelopment increases property values and thus property taxes. The additional revenue that would typically go to the city, county, school district and other taxing authorities is set aside for a certain period of time designated by the city in order to pay for TIF eligible expenses.
TIF request estimates provided by each development team was $594,000 for the 60-unit apartment building, $850,000 for the 32 townhomes and $800,000 to $950,000 for the 118-unit senior apartment complex.
According to Schafer, the current offices have a combined tax value of just over $1.3 million and currently pays $43,000 for the annual property taxes. Blaine receives about $6,000 of that because it gets between 13 and 14 percent of commercial taxes. He said the housing proposals would have a tax value between $8 million and $12 million, which means property taxes totaling between $80,000 and $110,000. Blaine receives just over 30 percent of residential property taxes, so the city would receive between $24,000 and $33,000 for these three residential developments.
While the council asked for these financial comparisons, it came down to choosing the development with the least amount of impact on the surrounding neighborhood.
Residents in any of these developments would have an access on 102nd Lane and could turn right on University Avenue, but would need to go to the nearest traffic signal to make a U-turn. Although the senior apartment would have been twice the size of the market rate apartments, Council Member Dick Swanson assumed the biggest traffic impact would have come from the market-rate apartments.
Council Member Wes Hovland also preferred the townhomes because it would add less traffic.
“Personally I think it’d be a better fit for the neighborhood,” he said.
Shade Tree Construction, of Ham Lake, will work with the property owners to purchase the land and will need official approval from the City Council before breaking ground.
Mark Strandlund, owner of Shade Tree Construction, said the homes will be priced between $225,000 and $275,000 but for sure under $300,000, since there is demand in the market for these affordable townhomes.
The townhomes would come in four-unit and eight-unit buildings with sizes ranging from 1,600 to 2,200 square feet with two-car garages. The townhomes would have a shorter height on the east side of the property to lessen the visual impact on the existing neighborhood, Strandlund said.