Wadena County Commissioners asked for ideas on how to spend their $2.7 million in America Rescue Plan Act (ARPA) funds and at least one community organization has come up with an idea.
The Wadena Development Authority is asking for a $600,000 slice of Wadena County’s ARPA pie to help jumpstart a major development project in Wadena’s Folkestads East Addition.
They say with just a fraction of the project moving ahead in 2023, the county will start to see a return in property tax dollars totalling around $58,000 annually. That’s a complete return within 10.5 years, according to Wadena Development Authority Director Dean Uselman.
Uselman shared plans of the project and a breakdown of costs. Purchasing the platted property would cost $265,000. Adding infrastructure needed to support the housing is estimated at $1.2 million. Without that infrastructure, the developers are looking at other property just outside the county boundaries.
That $1.2 million in infrastructure needs some help. That’s where the $600,000 in Wadena County ARPA funds comes from and another $200,000 from the city’s ARPA funds. The remaining $400,000 balance would come from Wadena Development Authority bonds/loan. WDA would repay those bonds by selling lots. Uselman said he did not believe the WDA would be making money on the project, as that was not the goal.
“I expect the Development Authority is going to do this as a means of creating housing, adding taxbase and creating tax revenue for the city, county and school district, as well as adding residents.” His goal is to see Wadena grow to 5,000 people before this decade is up.
“But we can’t do that without the infrastructure.”
Added attractions at the site are to include a nature park, which is more or less a wetland area right now. They also intend on using two lots for a park. This is the “city of parks” afterall.
If approved, the county would be spending about one-fifth of their ARPA funds on this and Wadena Mayor George Deiss said with developers in hand, and the need at hand, the project was a good one to support.
One developer has put out a plan to purchase nine lots and construct nine twin homes. Another developer has plans of building another complex in Wadena similar to the recently completed Roach Development townhomes. In addition to the developments there was still room for single-family homes to be built. Uselman laid out a long list of reasoning that this project made sense to invest in, No. 1 being this provided housing and real estate taxes in Wadena County, not Otter Tail County, a topic of interest for most every budgetary discussion.
While the idea had strong support from commissioner Bill Stearns, who said the plan was unbelievably better than what he could have imagined, commissioners from the northern part of the county were questioning the large check going to one community.
Commissioner Jon Kangas pointed out that there were many ways they could spend this money throughout the entire county.
He asked economic development director Katie Heppner about developments in the northern part of the county. Heppner noted that several homes going up in Sebeka and Menahga were done independently.
Kangas argued that developers are willing to take on a project that makes sense, even paying special assessments.
“In this case you are asking us to subsidize those lots,” Kangas said.
Commissioner Stearns responded that placing special assessments on lots doesn't work. They created much of the tax forfeited property that the county recently sold off. He noted that hundreds of thousands of dollars of special assessments were removed in Staples, Sebeka, Menahga and Wadena to get these properties back on the tax rolls.
Wadena Mayor George Deiss spoke in favor of the proposal saying that this amount was a fair share for Wadena considering the percentage of the population that Wadena makes up in the county.
Uselman reiterated that development in the county, wherever, should be supported.
“Regardless of where it is in the county, it helps everybody, it helps me, I’m thrilled to hear that there are $5 million in new tax base in Sebeka, Menahga, Staples, because that lowers my taxes as a Wadena County tax payer,” Uselman said.
Commissioner Murlyn Kreklau said his goal would be to still have a large amount of their ARPA funds next year. He said the county has many needs that have been put on hold for years that need to be considered first.
“The whole $2.7 million is not going to be spent on housing,” Kreklau said. He said he was not opposed to the project but was not eager to close the door on other projects until more discussion was had on all needs in the county.
Other comments from Interim City Administrator David Evans pointed to the positivity of adding such a significant development as it creates a more efficient infrastructure rather than adding it as homes are built without a plan in hand.
The WDA has not bought the lots yet. Without funds to pay for infrastructure, it's likely they will not buy the lots.
This first discussion was nothing more than that, though Uselman noted he’d like an answer soon as developers are eager to take action. Board chair Sheldon Monson appreciated all the comments which went on for nearly an hour and added that a quick answer was not likely to come from the group. The topic will come forward again for resolution.