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St. Michael Council Split on Proposed Town Center Development

The St. Michael City Council voted 3-2 to support a possible project pitched by Medici Homes, who is eyeing the Town Center North development. The catch? The city would have to front about $300,000 in improvements, and then wait for assessments.

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.

Bex March 10, 2012 at 02:54 PM
This is just a discussion on the article that was posted. This isn't the place to bring "a resolve". The people need to bring their suggested solutions to a city council meeting. As far as bringing people, according to Wikipedia the 2010 census numbers say that the population between St. Michael is just over 16, 000 Albertville is about 7,000. Monticello has a population of almost 13,000. So, the populations of St. Michael and Albertville combined is almost twice that of Monticello. This suggests to me that the population or number of consumers in our area for a business doesn't seem to be the issue. My family DOES shop and eat out locally, much to the chagrin of my bank balance. However, we are willing to pay more to support the STMA area. As far as "rooftops and roads", there seem to be plenty of rooftops, but other than 241, 19 and 35 (and Territorial between Berning's Mill and Rogers), there aren't any other options that I can see for more roads leading into the city. Those are the "main drags" so to speak . Also, it seems that the article infers that the targeted demographic for the development is babyboomers. Those people are getting ready to retire, if not already retired, right? Retired people, unless they've invested VERY well, are on a fixed income, are they not? That suggests that they would have less disposable income than people who are working? Cindy-you're a former City Councillor living in Arizona, now, right?
Bex March 10, 2012 at 02:56 PM
"Pizza parlors with low overhead can make it-they have little competition". Little competition? Hardly. A pizza parlor owner that we know personally told us that at last count there are 17 pizza places between St. Michael, Albertville, Otsego. I don't remember if that included places in Monticello or Elk River that also delivery to the STMA area.
Bex March 10, 2012 at 02:57 PM
We also did some Christmas shopping in St. Michael on Small Business Saturday - the Saturday after Thanksgiving.
Just a Thought March 12, 2012 at 07:57 PM
The math . . . We're spending $300,000 to create utilities 14 units (rooftops)? or $21,429 each unit in additional taxes and assessments? What is the developer bringing to the table? This is their burden, not our burden. They need to have a plan to make their development financially feasible without our support. We are not desperate for additional homes here. In fact, if the average family size was 3.13 (2010 Census), and they build 14 units, that's a whopping additional 44 people in the city of St Michael!! Now, really, an increase of 44 people will not drive any additional commerce! Make the developer pay the price if they really want to be here and not take advantage of the taxpayers! If the city is going to financially support anything, it should be business or industry that creates jobs!
Genuinely Curious March 12, 2012 at 08:09 PM
For as conservative as this community is, you'd think y'all would be more in favor of letting the market decide what businesses should/shouldn't be in town...you want a community center, yet I doubt our community could support one without heavy subsidies from tax payers. You want a movie theater, yet the last one went out of business. You lament the plethora of pizza joints (there are a lot!), yet you continue to give them your business and they continue to turn a profit. The fact is, without bodies in the community these places you want won't survive.

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