Serving Northern St. Louis County, Minnesota

Town home developers still seek 2017 construction start

Marshall Helmberger
Posted 9/6/17

TOWER— The developers of the town home project on the city’s harbor say they’re ready to go and insist they still intend to begin construction on the first six town homes this fall. They put …

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Town home developers still seek 2017 construction start

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TOWER— The developers of the town home project on the city’s harbor say they’re ready to go and insist they still intend to begin construction on the first six town homes this fall. They put that intent in writing in a recent letter to city officials and it puts increased pressure on the city to fulfill its part of the development project. That includes installation of water, sewer and the access road to the project, which is scheduled to include 20 town homes at completion.

The city’s engineer, Matt Bolf, had raised the prospect of a delay in the project back in July, when he laid out the timeline for platting the site and obtaining a number of permits, including wetland permits which could take months to be approved. He also highlighted the need for soil borings to determine if a small area of wetlands that will need to be filled for the project will be stable enough for building. If not, said Bolf, it could require extensive soil remediation.

Meanwhile, the developers were facing an issue themselves, since they couldn’t convert letters of intent into bankable purchase agreements until they had final legal descriptions, which would only be available after the plat was approved by St. Louis County. City officials have previously indicated they won’t proceed with their end of the project until at least five purchase agreements are in place.

Project manager Orlyn Kringstad said he’s confident that his team will be able to have at least five signed agreements once the legal descriptions are finalized and they now say they can move forward with the first six town homes without soil testing or a wetland permit. If so, they believe they can begin construction this fall on the first six town homes, which do not impact wetlands. That would allow the project to move forward even as the city works to obtain permits for later portions of the project.

Whether the city will agree to a two-phased approach remains to be seen, in part because doing so could increase the costs to the city and the risks for both parties. The cost of the road and other utilities is expected to be at least $750,000 and possibly much more. The city has $350,000 in funding earmarked from the IRRRB, which leaves a substantial funding gap that the city will likely fill by issuing bonds. But in July, Mayor Josh Carlson indicated that he wouldn’t support bonding for only a portion of the project, and wasn’t interested in two separate bond issues because of the legal costs involved.

The city would also have the option of trying to fund the initial phase using the IRRRB dollars, and tapping bonding proceeds for the rest of the project.

As for the soil issue on subsequent portions of the development, Kringstad and project master developer Jeremy Schoenfelder noted that they have identified an alternative approach that will allow them to proceed with town home construction without soil remediation, by utilizing pilings. “It is understood that the city is aware of the estimated costs of the soil remediation necessary for developing the road and utilities as located in the current site plan and is capable of funding those improvements,” they wrote in their recent letter, dated Aug. 26.

The issue will be on the agenda at next Monday’s meeting of the city’s harbor committee. It will be the first time in a couple of months that all the parties will be able to get together to revisit timelines. City Clerk-Treasurer Linda Keith said the city is prepared to move forward as soon as possible. “I think the only thing that would hold us back is the permitting.”

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Rick Sathre

The news that the townhouses could still be started in 2017 is wonderful. The catch 22 continues to be the City wanting signed purchase agreements prior to proceeding with their part of the project, which includes creating and filing a final plat. Until the townhouse lots are created by the plat, the signing of a "binding purchase agreement" is not legal and proper. If the City is planning to create parcels without a plat just so signed PA's can be completed I hope the City has excellent legal advice. I foresee greater costs to the City, and potential errors.

Friday, September 8, 2017