City looks at multi-family housing

FAIRMONT — On Monday evening the Fairmont City Council heard from Economic Development Coordinator, Linsey Preuss, regarding a multifamily housing project.

Preuss said the Community Asset Development Group has submitted a letter of understanding to develop a 48 unit market-rate multi-family complex at a site near Fairlakes Avenue.

“The developer has entered into a purchase agreement for those two cul-de-sacs with the property owner,” Preuss said.

She said they’re looking at building four separate, 12-unit buildings which will equal 48 market-rate units.

Preuss said both city staff and the city attorney have reviewed the letter of understanding and are comfortable with the provisions in it.

She said the letter is a non-binding agreement and provides a framework for future modifications. They will also need to go through several public hearings.

Councilmember Randy Lubenow asked about money coming in from HRA and other sources. He asked if there would be money available for other groups.

“How are we going to police this so that everyone gets a fair shake? I don’t want to give all the money to this project so that another group comes and there’s nothing,” Lubenow said.

Preuss explained that it would be Tax Increment Financing and tax abatement.

“As for the HRA, we’re not going to be requesting all of the money for one developer. We do know that there are a number of developers looking at it but that’s up to the HRA to decide if they’re interested in moving forward on it,” Preuss said.

Lubenow pointed out that 48 units wouldn’t solve the housing problem.

Councilmember Britney Kawecki asked about the total number of affordable units. Preuss said 20 percent of the units would be reserved for renters with incomes of 50 percent or less of the area median income, which was one of the requirements for TIF.

Kawecki asked why a TIF versus a tax abatement.

“Basically they could do either one. In this case, they’re looking at the TIF. It ends up being easier administratively,” Preuss said.

Kawecki said in the past TIF has been pay-as-you-go, so she questioned why in this case they’re asking for money from the HRA.

“They’re asking for a portion of it to be upfront. The HRA doesn’t have enough money to do it all upfront,” Preuss said.

She said they’re looking at the HRA doing a forgivable loan, but that it’s all very preliminary.

Kawecki said she doesn’t know how the project meets the need of investing in a TIF so that’s a concern for her.

The board unanimously approved the letter of understanding.

Moving to other matters, City Administrator Cathy Reynolds went over a modification to the Community Center Advisory Board.

Reynolds said the board was originally created to include Martin County residents to sit on it in order to get their input.

“But with the code provision it requires board members to be inside city limits, so we are back with an amended resolution taking off Martin County provision, so it will be inside city limits and then modifying the school board from being a member of it to a request that the school board sends a liaison to the advisory board,” Reynolds said.

Reynolds asked the council to approve of the provision and also to appoint Lisa Kuhl to replace Mike Anderson of the Fairmont Youth Hockey Association.

Lubenow asked how they could go about changing the code from saying a resident of Fairmont can be on a board to include a business owner in Fairmont or someone who works in Fairmont or has a vested interest in Fairmont.

“Stuff like this would affect the county,” said Lubenow.

Reynolds said that it’s part of the city code and changing it would involve changing the ordinance.

Foster said there has been talk about changing it in the past, but no action has been taken. She also said they typically don’t have a problem filling positions.

“We have professional right here within our city limits,” said Foster.

The council approved the motion, as well as the motion to approve Kuhl to replace Anderson.

Assistant Finance Director, Chris Ziegler, went over a contract with Minnesota Valley Action Council to provide a customer assistance program for past-due residential utility bills.

Ziegler said that the city has been getting funds through the American Rescue Plan Act. He said there’s a number of authorized categories the funds can be used for, including responding to economic impacts, replacement of revenue for government services lost due to the pandemic and necessary investments in water and sewer infrastructure.

“They also encourage an additional emphasis on populations that have had a disproportionate impact,” Ziegler said.

He said staff and the PUC have proposed to use $100,000 of ARPA funds to create a customer assistance program through the Minnesota Valley Action Council for Fairmont Public Utilities’ customers who are close to disconnection due to low income or effects from Covid.

“Other communities have done similar projects. St. Peter is one we kind of modeled this after,” Ziegler explained.

Ziegler said that there is still about 1 million remaining in ARPA funds and there have been internal discussions about what to do with it, but they would like to use some toward water and waste-water infrastructure.

“It really seems like a win-win. It’s helping people get out of utility debt, that were impacted by Covid and it’s helping the city collect that past due,” said Lubenow.

The council voted in approval of the project.

In other news:

— City engineer Troy Nemmers urged residents and businesses to do what they can to conserve water as the DNR has moved the whole state in the draught warning phase.

— Reynolds shared that the liquor store will be open on Sundays again, starting Aug. 8.


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