The Free Press, Mankato, MN

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October 27, 2012

Much ado about Marigold project

— A proposed six-story, 108-unit rental housing project in lower North Mankato will get a series of city hearings, as supporters say it will bring residents and vitality downtown and critics warn it puts taxpayers at risk and would mar the historical and architectural ambiance of Belgrade Avenue.

The fate of the project also will decide whether property taxpayers will or won’t be on the hook for bonds sold to pay for demolition of the old Marigold Dairy in 1990 and the city’s subsequent purchase and removal of several houses on the site. Those bonds balloon from $17,000 a year now to $90,000 in 2016. Without a development on the site, the city would likely have to use general funds to cover the added costs. (See related story.)  

The first meeting on the project is before the Planning Commission 7 p.m. Monday. Because the project is taller than the three stories allowed under city code, it must receive a conditional-use permit from the commission.

Acting City Administrator Mike Fisher said the height issue is the only issue before the Planning Commission. Issues about the project’s financing, feasibility and other issues will be taken up at the Port Authority meeting Tuesday morning and a later City Council meeting.  

Developer Van Moody, who built the two-story Marigold I project, is hoping to  win approval for the $17 million project.

With mostly one- and two-bedroom units, the complex would aim for higher-end renters with rents estimated at $1,100 to $1,800 per month, with two penthouse suites renting for $3,500 a month.

The developer will seek tax-increment financing to help finance the project. The amount of TIF was estimated at $1.8 million when the project was first unveiled last spring. TIF is a subsidy in which additional future property taxes generated by the apartments are used, for a certain number of years, to help the developer pay for the project rather than going into the city’s general fund.

The project would include underground and surface parking and some covered parking on the first floor. The first floor would also contain a lobby, bar/lounge area for tenants, and a fitness room.

The five stories of housing would include amenities such as granite countertops and individual balconies on each room.

U.S. Bank would provide primary financing. Moody said he expects final approval for the bank financing in the next two weeks.

Mayor Mark Dehen said he’s tentatively supportive of the plan.

“From my perspective, the idea of adding residents to our downtown central  district and potentially bringing more retail purchasers down is good,” Dehen said.

And, he said, based on the county assessor’s estimates, the project will bring in about $250,000 in annual property taxes, which is more than originally estimated when the plan was first unveiled in March.

The downtown business owners association supports the project as does the City Center Partnership.

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