At the June 14 meeting of the Preston City Council, preliminary plans for redevelopment of property near the intersection of North St. and Center St. was discussed at length. Councilman Robert Maust was absent.
City Administrator Joe Hoffman and the EDA have worked on possible terms for a development agreement with Andy Bunge. The EDA has been planning for some time to redevelop the area.
Bunge said he and his brother had a vision of what could be done in this area about 15 years ago. Now, with a focus on that area he feels they have a good plan to turn vacant property and blight property into new homes. Bunge explained, as a private developer, he can’t afford the total cost of removing old structures and rebuilding. He suggested the possibility of using an old structure as a training session for firemen and hauling what is left to an approved landfill.
The EDA recommended that the council enter into an agreement with Andy Bunge under specific listed terms. The city would be obligated to establish a housing TIF district, provide a $29,000 housing development grant, and to release the lien after the foundation of the first two units is completed.
Bunge’s obligations would include, but not be limited to, the purchase of the McCallson property, demolition and removal of structures, construction of a two unit townhouse with market value of $200,00 or more, grant the city first position lien on property, ensure initial sale of each unit to TIF income qualified purchases, and provide a “but for” letter to the city requesting assistance.
Bunge maintained a partnership with the city could turn blighted areas into new housing, thereby increasing the city’s tax base. The hope is to bring in families that want to live in a safe place, near a park and trails, and still be close to several larger cities.
Councilwoman Holly Zuck was concerned about street work that would need to be done if development was done beyond the twinplex. Hoffman said if nine units total were built, the developer would pay us $10,000 per unit for units three through nine. This would provide $70,000 total, which he suggests could pay half of the street utility costs. The first money collected from the TIF would likely go toward the street project.
Bunge said he would try to build them as fast as he could sell them. The units in this location would not have basements and fill would have to raise some of the area four feet higher than the current level.
Hoffman noted that they could not collect a dollar on the $29,000 grant until after 15 years. He suggested the city would essentially be writing off the cost of acquiring and cleaning up properties in return for the development of those properties.
The council did not make a decision this day, but asked Hoffman and Bunge to further discuss possible options and bring them back to another meeting for more discussion.
Other business in brief
• A revolving loan in the amount of $7,500 was approved as recommended by the EDA for Brenda Lloyd and Mike Eickhoff to assist with the purchase of the Sweet Shop. The loan is to be repaid over a period of seven years at an interest rate of 2.5%. The buyers are also getting bank financing. Current owner JoAnn Szuch made the offer to sell to Lloyd. Lloyd said she loves working at the Sweet Shop and loves the customers. She believes it is an important part of Preston.
• At the June 5 meeting, the proposal from the Preston Historical Society to build a 22-foot addition on the west side of the Historic Elevator was discussed. The addition which will house the bag house and office requires a variance. City zoning requires a 50 foot setback from a low density residential zone. Planning and Zoning met and recommended approval of a variance allowing a 40-foot setback. The variance was approved by the council. The Preston Historical Society will request a grant from the Minnesota Historical Society for use of Legacy Funding for the addition.
• The city hall project is coming along. The canopy is sufficiently completed so that the sidewalk can be done. The council gave Hoffman the authority to get two quotes for the work and to accept the low quote to keep the project moving along. In addition to the completion of the canopy and the sidewalk, the mural installation is yet to be done.