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Housing development proposed

The Bemidji City Council Monday evening heard a request from a developer interested in creating a low- and moderate-income housing development in Bemidji.

Kuepers Inc. Architects & Builders, a firm based in Baxter, has proposed to develop Pine Haven Townhomes, a low- and moderate-income housing project. The development would be built along 15th Street Northwest near the site that will host the Headwaters Housing Development Corporation's transitional housing development.

Kuepers representatives, in a presentation to the City Council, asked for the council's support as they prepare an application for funding through the Minnesota Housing Finance Agency.

Kuepers Inc. applied for financing last fall through the MHFA, which considers applications based on a points system.

Steve Kuepers, the executive vice president of Kuepers Inc., told the council that the project ended with 60 points and the cutoff for financing was 71 points.

This year, as he prepares for a June application, the project is aiming for at least 71 points.

"That would make us competitive," he said.

Kuepers and William A. Kemp, a consultant with Podawiltz Development Corporation, outlined their plan to garner more points for the second application.

Points would be gained, they explained, if the city could consider waiving or reducing project fees and connection fees for using city sewer and water.

Additionally, they said, the council's support of using Tax Increment Financing would also garner additional points.

No action was taken. Two councilors - Barb Meuers and Kevin Waldhausen - were absent from the meeting. The resolution of support was placed on the council's May 17 meeting for consideration.

The initial project from last year already has been amended to, hopefully, garner more points, Kuepers said.

The plan was amended from 32 planned units to 30, and Kuepers said 51 percent of project ownership was given to the Central Minnesota Housing Partnership, which would allow for it to compete for funding through the MFHA in its nonprofit pool.

Councilor Jerry Downs asked if that would result in a nonprofit building, which would not be eligible for taxation.

"Thirty years from now it could happen, I suppose," Kuepers said. "But the chances would be slim to none."

Downs also stated that he would have a difficult time approving a request to lower fees when a low-income housing development could prompt more police calls.

Kuepers and Kemp both stressed that the development would not be Section 8 development. Section 8, also known as the Housing Choice Voucher Program, subsidizes housing through the U.S. Department of Housing and Urban Development for low-income families and individuals.

Kuepers said renters would have to meet income guidelines to be eligible for Pine Ridge Townhomes.

"This is geared more toward working families," he said, noting that rent for a two-bedroom unit would be about $595 a month and a three-bedroom unit would be about $695. "You have to be able to afford rent before you can move in."

Mayor Richard Lehmann said he would not support using TIF toward the development. He wondered whether the project might benefit, though, if the council were to say it would consider - not guarantee - the use of TIF on a resolution for MFHA consideration.

Kemp cautioned against that tactic.

"I think MFHA would bank on that," he said.

Lehmann and Downs both said fees are associated with building projects because they fund the city's operations.

Councilor Greg Negard said he was struggling with the request because he was afraid it would set a precedent for other developers interested in asking for reduced fees or TIF.

"There will be others coming to the table," he said.

Negard also said he understands, personally, the desire to ask the city for making exceptions.

As the executive director of the nonprofit Paul Bunyan Transit, Negard said, he is considering asking the city to reduce fees associated with the construction of a new building.

"As director of Paul Bunyan Transit, I feel I have to do that," he said. "As a member of the council, I'm struggling with that."

Kuepers told the council he understood the decisions they were wrestling with, but said they also should consider the needs of the city and its population.

If the project fails to secure funding this time, he noted, he would move on.

"I'm doing one last shot at this, giving it the best possible chance for going forward," he said.