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Abatement plan giving edge to Mower building

Many of the homeowners and builders applying for a five-year property tax abatement are saying the plan is one factor tipping them over the edge to build in Mower County.

But some on the Mower County board want to be sure they’re hearing that kind of reasoning from the applicants.

The county board approved seven tax abatement requests on Tuesday through the Austin Housing Initiative, a plan by the city of Austin, county board and Austin Public Schools to give an incentive for residential construction. One would not qualify if construction has already started.

David Hillier, a former commissioner, spoke in favor of an abatement he and Lance Pogones applied for to build a twin home, half of which will be purchased by Gail Nelson.

Hillier spoke of how many couples often are uncertain about whether the time is right to build, as he spoke of the uncertainty of such a decision.

“Should I? Should I? Should I ?” Hillier said of that uncertainty. “Well, this abatement program kind of pushes them over the edge to make that decision.”

Nelson, Hillier said, will move into a smaller home and she’ll be able to put her home in Austin on the market.

“It puts a very gorgeous home on the market,” Hillier said.

Commissioner Polly Glynn was pleased with Hillier’s explanation.

“I think you tapped into exactly what the plan was” when the board agreed to offer the tax abatements, Glynn said.

And Commissioner Jerry Reinartz said that’s why it’s important for applicants to appear at the meetings and speak about the need and reason for applying.

Reinartz argued for the importance of hearing the reason applicants are seeking the abatement instead of simply rubber-stamping the proposals without more background.

“That’s wrong in my opinion,” he said.

However, County Coordinator Craig Oscarson and others said it’s a tricky area to require applicants to be present at meetings, though they traditionally tell all applying for county abatements or permits that it’s in their best interest to appear.

Four of the seven applications at Tuesday’s meeting were represented.

On Monday, the Austin School Board unanimously approved tax abatement requests for Michael Staben, New Horizon Homes, David Hillier/Turtle Creek Construction, and David Hillier/Gail Nelson/Turtle Creek Construction. The county abatements were for: Staben / Grev, Edward and Mary Wilson, Michael Walerak, New Horizon Homes, Hillier/Lance Pogones, Hillier/Pogones/Nelson and Andrew Gray.

Mary Wilson, who received an abatement in Windom Township, told the board her family sought the abatement to make the build more affordable.

Walerak said he bought the property from his father, and he said the abatement was one reason he and his family decided to move back to Austin from Zumbrota.

With the abatement, Walerak told the board he’d like to use the saved money to plant more trees and windbreaks on the property.

The Austin Housing Initiative originated with the city of Austin. City officials first brought the abatement forward as a way to spur development of new residential property as it seeks to address the need for 300 rental units and 118 single family or townhouse units by 2020, a need that was outlined in a 2013 housing study. The city is currently updating that study as it continues to discuss housing.

Last year, the county joined the city and Austin Public Schools in approving the plan to offer tax abatements to give residents and developers of new residential property a break in an effort to spur residential development. The plan means people building new homes and apartments over the next three years can apply to each entity to not pay property taxes for five years.

But Reinartz pushed for the board to get more explanation and details from the applicant because the abatement, he argued, is a tax shift, putting off what would traditionally be new tax revenue. Reinartz argued giving an applicant five years free of property taxes pushes the burden to existing taxpayers, so it’s an important consideration for the county.

Proponents of the abatement have argued the abatement sacrifices five years of taxes as an incentive to boost the long-term tax capacity as the average homes stays on the tax rolls at least 40 to 50 years.

The county has approved 17 tax abatements to date.

—Deb Nicklay contributed to this report.