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Detroit Lakes Development Authority approves $350,000 package to redevelop Washington School

After a two-week redraw, Union Central LLC came back to the Detroit Lakes Development Authority with an updated proposal to redevelop the former Washington Elementary School, and this time went away with some assistance.

Union Central LLC -- named for being at the corner of Union Street and Central Avenue -- representatives Roger Winter and Bob Bristlin appeared before the authority members to ask for $350,000 in tax increment financing for their $2.7 million project.

The project includes tearing down the old portion of the school, gutting out the newer portion and building on to have a 30-unit housing facility. The men requested $150,000 upfront for demolition costs and $200,000 in pay as you go TIF.

After discussion on TIF monies and loans, the authority ultimately granted Union Central LLC $100,000 upfront and $250,000 pay as you go TIF over 20 years.

Concerns from the authority came in the form of both upfront money and the 20-year investment.

"When we started it, we weren't sure what we were going to be doing," Bristlin said of the options for housing or commercial redevelopment. "When we went to 30 units of housing, there's more cost in it."

Although the project lists 16 two-bedroom units, after talking with housing authority director Gordy Grabow, Bristlin said they'll likely change some of the one bedroom units to two bedroom because of the higher demand.

"I don't want to be locked into a number of units," he told the authority.

The proposed facility will be "catered" living, where there will be kitchen and dining room services available if residents would want to take advantage of them. They are also proposing a "night room" if someone comes to visit and needs a place to sleep while visiting someone living in the facility.

Although Winter and Bristlin are targeting seniors, they have no intention of being subsidized because if the apartments don't rent to seniors, they'll have the option of opening them to anyone who can pay.

"I'd definitely like to see this redevelopment," authority member Bruce Imholte said. "I support the upfront dollars but maybe (limit it to) $100,000 because that's demolition costs."

Not completely in favor of the upfront money or the 20 years, authority member Tom Klyve said, "the request is outside our previous approvals."

Although the authority has limited the upfront monies and number of years on the pay as you go TIFs, there have been past projects that were granted similar requests.

"We want to get going, get the demo done," Bristlin said. "If we didn't have to take the old building out, I wouldn't care about the upfront."

Imholte agreed that while he may not be agree with the upfront and length of TIF, he supports the project because of its location.

"The city has already identified (North Washington Avenue) as a priority area," he said.

Authority member Mark Hagen agreed that he supports it because this is the first development project proposed in some years, rather than just new residential housing.

The developers plan to start the project as soon as possible.

Also at the DLDA meeting, authority members set a date of May 1 for submitted requests for proposals for the crescent redevelopment area.

When first proposed, the due date for proposals was much earlier, but then it was suggested to hold off until the end of July to get more interest and potential developers.

Community Development Director Larry Remmen suggested "a compromise to get the best of both worlds" and a deadline of early June. "That's not going to cut anyone off who's interested" in submitting proposals.

The proposals are for the property north of Holmes Street, which the city already has, and a second phase will include the property to the south of Holmes Street, which the Minnesota Department of Transportation still has control of before it is turned back to the city.

There is a clause in the requests for proposals that will give the DLDA extra time if need be to accept more proposals.