In a vote that split the St. Michael City Council 3-2 for the “first time I can remember,” according to Mayor Jerry Zachmann, the city will move ahead with a possible proposal for development in the Town Center North division.
The development, pitched by Medici (Meh-dee-chee) Homes, would consists mainly of single-floor, detached townhomes, one of the most desired forms of living for Baby Boomers, according to housing inventory surveys done throughout the state, including the northwest Metro area.
Medici is finishing up such a development in what was Hassan Township, now Rogers, near the location of Hassan Sand and Gravel. That development, according to Marc Weigle, the city’s community development director, is nearly full.
“And it doesn’t have nearly the proximity to things like shopping, banking and even schools that this one would,” he said last January, when the idea was first brought to the council’s attention.
The catch? The city would be asked to do something it hasn’t done in years. St. Michael would front about $300,000 in costs, putting in a new road, sewer system and lights for the first stage of the development, which is about 14 lots.
That was enough to draw concern from Kevin Kassle, the council’s second-ranking member.
“Looking at this, I don’t think I can be in favor. There are 74 homes for sale, last I checked, in t his city. And more on the verge of foreclosure. I don’t think we should be subsidizing builders with what, essentially, is a short term loan,” he said.
The $300,000 would be paid back through assessments, or taxes levied in addition to normal property taxes, on the homebuyers.
Communities as close as Maple Grove and as far away as Fargo, N.D. have used this kind of system to maintain growth even during lean years like 2008 to 2011, said City Administrator Bob Derus.
“This is the only way Maple Grove develops,” he said. “In 1996, when I was doing research for my thesis, Maple Grove took in $110 million in revenue through this method of development. Commerce has to happen around the town center. You bring that in with more housing. Then that continues the cycle.”
Assistant City Administrator Steve Bot said he, too, was willing to take the risk.
“It has to be financed [the project] before anything happens. And then, if for some reason, it goes belly up, banks are typically paying cities first, because they don’t want to pay penalties in addition to that outstanding debt.”
Still, council member Joe Marx said he was hesitant.
“Would this be considered a pilot project? There aren’t other builders asking us to do this,” he said.
said the city would not be bound to anything by moving ahead with a vote to support the project. The development would still start at square one, with the planning commission.
“This, essentially, just starts work between myself and staff,” he added.
Mayor Zachman, Nadine Schoen and Chris Schumm voted in favor of moving ahead with the development. Marx and Kasel voted agaist the proposal.
“If this is the way we have to compete, we have to wait. It looks like we’re running after stuff. We need to be patient,” he said.