The Free Press, Mankato, MN

November 12, 2013

Nicollet County approves St. Peter purchase of failed subdivision

St. Peter has proposals to resell town home development

By Josh Moniz
jmoniz@mankatofreepress.com

---- — MANKATO — The City of St. Peter's plan to guide the redevelopment of the failed Welco West subdivision on the western side of the city advanced Tuesday with the Nicollet County Board's divided decision to transfer ownership of the property.

Valued at just over $1 million, the 12.7-acre subdivision entered tax forfeiture earlier this year due to unpaid taxes and assessments. Nicollet County would normally proceed to auctioning off the lots after taking possession of the subdivision, but the city of St. Peter submitted a request to take ownership of the property.

St. Peter City Administrator Todd Prafke said the subdivision is very difficult to redevelop due to the lots being only platted for town house units, thus adding significant cost and paperwork to any plan involving a different type of housing. He said the city wants to help any potential developer quickly navigate the paperwork. He also said the city is interested in controlling the property to emphasize redevelopment proposals that fill city-wide needs outlined in St. Peter's housing study.

He said this is the first time the city requested this unique approach.

The Nicollet County Board approved a draft resolution Tuesday authorizing the transfer of the subdivision on a divided 3-2 vote. The debate among the commissioners was whether the need to guarantee timely development of the subdivision was more important than the funds Nicollet County could hypothetically capture by eventually selling the property. Additionally, since the city wants Nicollet County to declare the subdivision "economically blighted" for the formal justification of the transfer, commissioners asked that officials verify state statutes are met for the classification.

The city agreed to sell the subdivision for $463,000 with Nicollet County receiving $47,000 for transfer related costs and the city receiving the remaining $416,000 to recoup the current outstanding assessments. The City will not turn a profit on the sale, but both the city and Nicollet County will gain new tax revenues when the property is redeveloped.

Future plans

Prior to settling on the selling price, the city had two pending redevelopment proposals for the subdivision. John and Lisa Volmary, who manage Aspen Court and Alpine Meadows Townhomes properties in St. Peter, proposed building 39 single-family rental units in two-level homes. The northern end of the subdivision would be turned into a park with biking and walking trails. The southern and eastern ends of the subdivision would be sold as 100-foot residential lots. The properties would be managed by the Volmarys' rental company.

The Volmary plan would build 27 units by 2014 or 2015, with the rest being completed by 2016. The proposal offered paying $350,000 at closing or $380,500 over three years with $100,000 paid at closing.

Mike Drummer, owner of Drummer Construction, proposed mixed housing with the existing, occupied homes being combined with four new triplex buildings into a lower traffic “neighborhood” section. The northern side would be turned into a three-story apartment building with a swimming pool and playground. The apartments would include studio, two-bedroom and three-bedroom units. The apartments would be rented to young professionals for $650 to $1,200 per month.

The rest of the lots would be developed into single-family starter homes similar to the Cougar North subdivision in Mankato. They would be sold to young families for $140,000 to $185,000.

The proposal would begin construction in spring of 2014. The proposal offered $600,000 at closing, but requested the City waive nearly $200,000 in building permits and other related fees.

St. Peter City Council will meet to discuss the next step of the plan at its December or January 2014 meeting.