BP council OKs bond sale for housing project
Published 10:27 am Friday, July 17, 2015
By Ashley Stewart
Owatonna People’s Press
BLOOMING PRAIRIE — A new housing development the Blooming Prairie City Council approved earlier this year is now moving forward.
On Monday, the city council approved the issuance and sale of $470,000 in bonds to fund the project on 6th Street Northwest, which will be the third addition in Hansen Heights on the northwest side of the city within the last 40 years.
“This is a pretty unique project because it hasn’t actually followed all the traditional steps that we follow when we do a project,” said Mike Jones, Blooming Prairie city administrator. “But we’re now bringing it to an end here during the council meeting with the actual issuance of bonds to pay for it.”
The project is the result of nearly a year of discussions between the city council and Peter Vogt of Blooming Prairie who has interest in developing land on 6th Street Northwest.
According to the developer’s agreement, which the city council approved in April, Vogt plans on developing 13 lots for residential and one for the city’s retention pond.
At that time, it was determined the project, like previous developments, would come at a cost to the city.
That cost comes with the extension of the water and sanitary sewer services and storm sewer system as well as the construction of a retention pond.
On Monday, Jones said it was possible the city’s investment in the project, which includes engineering, bonding and contingencies, would be about $145,000.
He said the project would be paid through revenues from the city’s water, sanitary sewer and storm sewer funds and special assessments.
Each lot will be assessed at $25,000 for a total of $325,000 that Vogt will be responsible for paying the city back under the developer’s agreement.
Jones said during a public hearing before the council meeting, properties adjacent to the new development will not be assessed against the project.
He added he doesn’t expect the tax levy to increase because of the project.
That’s because the city council increased the storm sewer fees in June.
Prior to the decision, each household in Blooming Prairie was charged $2 a month for storm sewer, and each commercial property was charged $4 a month.
But in June, the council voted to increase it to $4 a month for households, schools and churches and $8 a month for commercial and industrial properties.
“This would be scarier if it was millions of dollars, but it’s not. It’s not,” said Blooming Prairie Mayor H. Peterson. “It’s something we can handle even if it does go south. We’ll be all right. I don’t think it will. Even if it does, we should be OK.”
The first bond payment is expected in 2016.