ST. PETER — The owners of Drummer Development received final approval this week from the St. Peter City Council to purchase the Welco West subdivision from the city, clearing the final hurdle to the property's redevelopment.
Welco West was created in 2004 by Welco West Development, which dissolved due to bankruptcy during the recession. Last year Nicollet County obtained the subdivision when it entered tax forfeiture. The city seized the opportunity to purchase the land and speed up its redevelopment. After reviewing proposals by regional developers, the council selected Drummer's mixed-housing proposal because it met needs outlined in the city's housing study.
Drummer is planning to build 11 townhouses, 32 single-family homes and a 40-unit apartment building. The developer agreed to build a minimum of six rental units to the full standards of the American Disabilities Act and increase accessibility for one townhouse and one single-family home.
Drummer will purchase the subdivision from the city for $468,000, which will recoup the city's paperwork costs for transferring the property. The sale is intended to speed up the property's return to the city tax rolls.
Additionally, Drummer will put $50,000 in escrow with the city. The funds will be reimbursed if the redevelopment meets the city's performance standards, such as obtaining all necessary permits, by Dec. 31, 2016.
Drummer will have the option to build another 40-unit apartment building after the city completes construction on a new regional stormwater basin for the subdivision. The project is expected to increase the property's market value by over $9.5 million.
Drummer will be responsible to pay the cost of removing the abandoned utility lines at Welco West that were left by the last developer.
Going forward, Drummer will be able to start obtaining city permits and begin construction. The city is expecting to gain about $240,000 in permit fees from the redevelopment.