Following the public meeting on Tuesday, Feb. 28 at the Cook County Courthouse in the commissioners room that was held to discuss the Lutsen housing project, Greg Gentz met with Cliff Knettel, Director of One Roof Housing, to get some questions answered.
After four long years of planning by the Cook County/Grand Marais EDA, it looks like the workforce housing project in Lutsen is finally going to happen.
Following a public meeting where most of the comments from the public were favorable, Cook County commissioners unanimously passed two motions in support of the proposed 16-unit workforce housing that will almost assuredly be built in Lutsen this summer.
The well-attended meeting was held at 5 p.m. on Tuesday, Feb. 28 in the commissioners’ room. Out of the 22 people who spoke, only four had reservations about the way the county was agreeing to help establish financing for the development.
The first motion was to grant an abatement of property taxes “imposed on the county on a parcel of property, if certain conditions are met, through the adoption of a resolution specifying the terms of the abatement.”
As stated in the decision, “The project is the first step in addressing this economic development need in the county. The county expects the benefits of the proposed abatement are not less than the costs of the abatement. The public benefits that the county expects to result from the abatement will be more affordable workforce housing within the county.”
The abatement was granted for 20 years and will reduce the county’s entire portion of the taxes for each of the properties. The abatement will not exceed $80,000 per year or a total amount of $1,600,000.
A second resolution authorized the sale of general obligation tax abatement bonds, series 2017A for the approximate amount of $1,575,000. Ehlers & Associates will handle the sale of the bonds for the county.
The workforce housing will be built on seven acres of land just west of Arrowhead Electric in Lutsen. It will be owned and managed by One Roof Community Housing, who the EDA sought as a partner. There will be four buildings erected, each with two one-bedroom apartments and two, two-bedroom apartments. The one-bedroom units will cost $800 per month while monthly rent will run $1,100 for the two-bedroom apartments. Utilities are included in the rents. Tenants must live and work in Cook County, pass a background check first, and no subletting or vacation rentals of the units will be allowed, said One Roof Director Cliff Knettel.
One of the speakers, Bill Hansen, said his dad, the late Frank Hansen who served as a Cook County commissioner in the 1980s, often said that affordable housing was the number one problem facing Cook County. Cook County I.S.D. 166 Superintendent Dr. William Crandall and North Shore Health Director Kimber Wraalstad both stated it was hard for prospective employees to find housing in the county, and some couldn’t take jobs at the school or hospital because no accommodations could be found.
Cook County Chamber of Commerce Director Jim Boyd said that as housing is built and more people can move here, the stores, gas stations, schools, restaurants, etc., will all benefit from having added workers, community members, and customers.
Based on a study conducted by Northspan Group of Duluth, the county needs to add 350 to 400 housing units by 2020. Private builders can’t afford to build workforce housing in the county, so the EDA sought help from government grants and loans and One Roof. Under terms of the agreement, the county will loan proceeds of the bonds sale to the EDA, who will, in turn, lend the money to One Roof. Rents will be used to pay back the bonds.
Four West End businesses, Lutsen Mountains Corporation, Lutsen Resort Company, Odyssey Development, Inc., and Tofte Management Company, LLC have signed a Shortfall Agreement, which guarantee rent for six rental units for one year and cash payments of $15,000 for the first two years.
No one who spoke was against building more housing in Cook County. Having county residents potentially be liable to pay back a bond in case One Roof left the project was at the heart of Greg Gentz’s argument to the board.
Jim Vannet, Hovland, stated, “Northern Minnesota was built by the Iron Mining and logging companies which furnished housing for their employees. Now the trend must be for the county taxpayers to help foot the bill.”
For the future, that well may be the case.
Leave a Reply