Five big projects get city's OK, one denied tax break

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Alexandria flexed its growth muscles at Monday night’s city council meeting.

Five major projects received green lights – a new veterans outpatient center, a new county jail, two major housing projects totaling more than $30 million, and a sweeping plan to develop the land near a proposed high school with a mix of housing and commercial uses.

However, one part of one of the housing projects – tax increment financing for Lakewood Terrace – hit a wall.

The council voted 5-0 to deny the developer’s request for TIF.

The developer is proposing to build two 16-unit buildings – each consisting of two and three bedroom units – on a five-acre site on South Broadway, south of 34th Avenue and just south of the Minnesota Eye Institute.

The total project cost is estimated at $5.2 million.

The council may have been swayed by the one person who spoke at the TIF public hearing. John Widmark, a property manager of affordable housing facilities in the city, said the proposed rental rates for Lakewood Terrace, ranging from $900 to $1,450 a month, were too high for low-income families to afford.

One of the requirements for receiving TIF housing assistance is for the developer to rent 20 percent of the units to those making 50 percent or less of the state median income.

Although Lakewood Terrace’s TIF application met that requirement, Widmark said the city should hold the developer more accountable. He suggested that the city use federal Section 8 guidelines, which would put the rent of an affordable two-bedroom unit at less than $700.

Before rejecting the application, the council asked one question. Elroy Frank wanted to know if the project would comply with Section 8.

Jason Murray, director of the Alexandria Area Economic Development Commission, which handles the TIF applications, said it probably would not. He added, however, that the application complies with all the city’s current requirements, which the city is in the process of reviewing.

With TIF, property taxes are frozen at the current amount for a specified period of time – in this instance, 13 years. The difference between the existing tax and the tax once property is developed, known as the “increment,” is used to help pay for some of the cost of the project.

The city also retains 10 percent of the increment for administrative fees.

As stated in the TIF application, the project was expected to increase the estimated market value from $172,700 to $3.2 million, generating an increment of roughly $34,233 per year. The amount of taxes paid was projected to increase from $2,159 to $39,496.

Although the TIF financing was rejected, Lakewood Terrace cleared some zoning hurdles. Its conditional use rezoning permit and zoning district application were both approved.

Council member Harvey Weisel noted that whether the developer will proceed with the project will be a test of the city’s TIF policy. In applying for TIF, developers must agree that the project can’t be done without tax assistance.

The first phase of the project is set to start in March of 2009.

Here are more details of the other projects that surged ahead Monday:

Veterans center

The new Veterans Affairs community-based outpatient center is proposed to be built on a 5.3-acre site at 515 22nd Avenue East, southeast of Nyberg Surveying.

The 10,000-square-foot facility would provide basic medical care, preventative care, and heath education to veterans. It would be open from 8 a.m. to 4:30 p.m.

The project is under a “very aggressive” timeline, according to representatives who spoke to the city’s planning commission, and they’d like to be open by June 2009 or early next fall.

The site has enough room for a 5,000 square-foot expansion. Mayor Dan Ness noted that the expansion may come sooner than expected in order to meet demand from veterans in Glenwood, Parkers Prairie and other nearby regions that weren’t considered in the original plan.

The facility will help cut the drive time for veterans in the area, according to Darcy Winter, a representative for the center. She said that many of them are now traveling to St. Cloud for their needs.

Along with medical care, mental health and home care services for veterans will also be offered. An on-site pharmacy is also part of the plan.

The plan calls for 43 parking spaces – five handicapped and 21 for employees.

The council voted to approve the conditional use application for the project.

County jail

In the works for more than five years, a conditional use application for a new Douglas County Jail was unanimously approved.

The jail will be located at the site of the existing public works facility (which is moving near the fairgrounds) at 509 3rd Avenue West.

The project will retain the existing public works administration building, demolish the existing shop/garage and construct a new jail.

The plan calls for 58 parking stalls, which exceeds the city’s minimum requirements.

The county is under a tight 18-month timeline to construct the new jail before the Minnesota Department of Corrections shuts down the current facility for not meeting state requirements.

The council approved the conditional use application for the project with several conditions. A 150-bed jail will require 15 parking stalls, plus two stalls for every three employees. The proposed 58 stalls are sufficient unless staffing exceeds 64 employees.

The county must also provide copies of access or other use easements from adjoining property owners.

It must also work out a written agreement with Alexandria Light and Power to relocate ALP’s existing storage area.

The project also hinges on formal approval by the city-county joint law enforcement task force.

Knute Nelson’s

assisted living facility

The council voted to give tax increment financing (TIF) to Knute Nelson’s new senior living campus.

Knute Nelson is proposing to build a 205,000-square-foot, 133-unit senior living campus that will include independent senior apartments, assisted living apartments, a wellness center and resident community spaces.

It will be located on Pioneer Road in southeast Alexandria, adjacent to the proposed site of a new high school.

The total project cost is $24.9 million. The increment is estimated at $139,200 per year. When completed, the project will increase the market value of the property from $354,048 currently to $12.66 million.

Taxes from the property are projected to eventually increase from $4,426 to $156,315.

Council member Cindy Bigger asked if the units would be considered affordable housing.

Knute Nelson CEO Mark Anderson said that 27 of the units would start at $533 per month, which meets the city’s requirements for having 20 percent of a TIF housing district reserved for low-income families. Other rents would range from $1,000 to $2,000 per month.

In related action, the council also approved giving the developers, LBR Properties, a final plat to convey the property, known as “Pioneer Addition,” to Knute Nelson.

Development near

proposed high school

The council agreed to amend the city’s 2007 Comprehensive Plan to accommodate a recently completed Alternative Urban Areawide Review (AUAR) for the Johnson Family Estates – a 550-acre parcel of land south of 18th Avenue and east of Nokomis Street (the area near the proposed new high school).

An AUAR is an alternative form of environmental review that allows local governments to examine the impacts of potential different land use alternatives in a particular geographic area.

The owners are proposing two distinct development styles for the site.

The property fronting Rosewood Lane would be strictly single-family residential. Property fronting County Road 46, meanwhile, would be higher-density residential – apartments, assisted living, detached townhomes, etc.

Commercial complexes would be located on the corner of busy streets. Some commercial buildings are expected to have retail businesses on the bottom with housing or apartments on the upper floors.

A new church may also be built in the area.

Another future goal is to change the alignment of Pioneer Road as it intersects with County Road 23 to make it more conventional, providing 90-degree approaches.

Parks, ponds and walking trails will also likely be located throughout the development. A trail may be built under County Road 46 to the new elementary school.

In related action, the council agreed to approve the owners’ requests for a conditional use permit and zoning district application. It also approved a final plat for the site, known as “Johnson Estates.”

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