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City okays $11 million bond for LSS housing project

Posted 8/15/12 (Wed)

By Neal A. Shipman
Farmer Editor

Lutheran Social Services (LSS) will soon begin construction of a new 120-unit apartment complex in Watford City pending a final decision by the Watford City City Council to allow the project to use $11 million in city revenue bonds on behalf of LSS.
“We intend to start work on the project in late August or early September,” stated Jessica Thomasson of LSS. “This will be a similar project to what we did in Watford City three and a half years ago.”
According to Thomasson, the city’s approval of the $11 million in bonds does not obligate the city for the debt, but rather affords LSS the opportunity to obtain a lower financing rate, which in turn, will result in lower rental rates.
“The city has the ability to issue these bonds on behalf of LSS,” stated Wyatt Voll, city attorney, during the Aug. 6 city council meeting. “It will not restrict the city’s ability to issue other bonds. But the city will have to hold a public hearing to get public comment before it can go forward with approving the bonds.”
According to Thomasson, the new housing project would provide one to three bedroom apartments with units available to low income as well as market-based rental units.
“There will be 16 units available with rents in the range from $400 to $600 per month,” stated Thomasson. “The rents on the remainder of the units would range upward from that level to $1,850 per month.”
While Thomasson noted that it is the intent of LSS to continue to provide affordable housing units, they also have to make the project economically viable.
“Eighty-two of the units will have no income restrictions,” noted Thomasson. “And the rent of those units will be from $825 to $1,850 per month.”
A public hearing on LSS’s request to use $11 million in city bonds will be held during the city council’s Sept. 4 meeting.
During Monday night’s meeting, the council also reversed an earlier decision and approved a $25,000 Roughrider Fund grant to allow for exterior renovations to the Boomtown Executive Suites LLC building.
The council had denied the request earlier because it was their belief that the tenants of the building were paying a portion of the cost for those renovations.
“The owners of the Boomtown Executive Suites LLC have not charged their tenants for any of the exterior work,” stated Jody Renbarger of the Roughrider Fund. “We want business owners to improve the exterior of their buildings. The committee wants to be able to help support that work and improve the look of our city.”
According to Gene Veeder, McKenzie County Job Development Authority executive director, he encouraged the owners of Boomtown Quick Lube to apply to the Roughrider Fund for assistance.
“This is a building that we have targeted for improvements for the past six to seven years,” stated Veeder. “We wanted the building’s exterior fixed up and to compliment what is happening in Watford City.
The council also approved a $36,000 Roughrider Fund grant for the ANOVA Family Health Center, which will be opening by the end of August in the Badlands Occupational Testing building.
“This new clinic has been in the works for the past year,” stated Veeder. “They have a one-year lease on the property and it is anticipated that they could see significant financial losses the first year as they ramp up their business.
According to Renbarger, the clinic would be staffed by two mid-level providers.
In other business, the council informed a group of housing developers that 17th Ave. NE would have to be brought to county standards before the city would consider taking it over or approve development plans.
According to Gary Garland of GT Investments, the three developers believe that they have been blind-sided by the city’s position.
“We’re getting stuck holding the bag for bearing the cost of bringing this road up to standards, while the oil companies and others that are using the road aren’t helping with the cost,” stated Garland.
According to Garland, when the developers purchased the property it was within the city’s ETA and was a private road and they would like to keep it a private road.
But city council members see the issue quite differently.
“If there is a call for emergency services and if the road is substandard, it makes it hard for responders to get there,” stated Justin Voll, councilman.
For Watford City Mayor Brent Sanford, it is a matter of fairness.
“We’re holding other developers to the requirement of having paved roads,” stated Sanford. “It is not fair to them if we let this road stay in its present form.”
According to Curt Moen, city planner, 17th Ave. NE was initially built as an oil road and that it was never built to any standards. And therein lies the problem.
“They (the three developers) are caught between the rock and a hard spot,” stated Moen. “The city didn’t have any say in the road when it was built. And now the city can’t accept it because it wasn’t built to standard. There is development that wants to occur out there, we just need a road that meets standards before we’ll approve the development plans.”
Moen also expressed his concern that if the road remained private and not to standard, the homeowners who purchased homes there could be responsible for the cost of maintaining the road.
“As it exists, I’m not comfortable with the road. You can’t run school busses on the road, it is too narrow and doesn’t have shoulders or drainage,” stated Moen. “It is just an oil field road.”