31-unit apartment building proposed, land would be transferred for $1

by John McLoone

After lengthy discussion, the Hastings City Council last Monday night agreed to authorize the Hastings Economic Development and Redevelopment Authority to sell a parking lot at 317 3rd St. East to a developer who plans a 31-unit apartment building on the downtown property and an adjacent parcel he owns.

The measure passed by a 61 vote, with Councilmember

Page 5 Mark Vaughn in opposition.

The predecessor to HEDRA bought the 9,200-square-foot property in 1985 and developed a small parking lot on it. Developer Luke Siewert is proposing the project. He said that because of the cost of demolition and getting the site ready for the proposed market- rate apartments, he is asking for consideration in the city’s Land for a Dollar program.

In that program, a loan commitment is necessary, but Siewert said that’s not possible without having a commitment that the city will transfer the property.

A memo to the council from Economic Development Coordinator Eric Maass explained the situation.

“Mr. Siewert has purchased the adjacent home to the west and seeks to redevelop the joint site into a 31-unit apartment building. The construction of the Red Rock Corridor parking lot across the street has eliminated the need for a parking lot on the site,” Maass said. “HEDRA and staff have been working on this project since early 2020. The developer has submitted construction and financing estimates. Those estimates indicated that the project would cost more than what financing could be secured through a bank loan and private equity, thus showing a financial gap. The financial information that was submitted could not be confirmed by the city’s financial consultant, Northland Securities, because a formal loan commitment had not yet been secured by the developer.”

HEDRA approved the plan and forwarded it to the council for a vote based on other benchmarks the project meets, including increasing the tax base and increasing residential housing. The HEDRA vote was 5-2 to transfer the property for $1, with council representatives Vaughn and Lori Braucks in opposition.

In council discussion, Councilmember Tina Folch said, “I think this is really exciting to have for the downtown area. I think it’s terrific. I’m a little confused about this issue. If Northland hasn’t approved this, if they’re not able to make a recommendation, why is it coming before us?”

Hinzman replied, “That’s an excellent question and one that HEDRA has been struggling with for months.”

“We don’t need a formal recommendation from Northland, it would be nice to have,” said Folch.

“There’s not written rules that Northland has to render an opinion prior. It’s a best practice that we have. In this situation, we would forego that to move this forward.”

He stressed that the actual land transfer wouldn’t take place without a bank commitment once a developer’s agreement is negotiated through HEDRA. The council action would allow final planning and financing for the project to take place.

“We’ll definitely be seeing the next steps moving forward,” said Mayor Mary Fasbender.“ That’s a good summary,” said Hinzman. “Council needs to authorize any sale of land HEDRA enters into. We want you to understand the terms of that sale. That would be for a dollar.”

Vaughn said he supports the project, just not giving away the land.

“I believe the project needs to move forward. I just don’t think we should be giving it away for a dollar,” he said.

The land is currently assessed at $60,000. He advocated getting the property appraised and selling it for market value.

“It’s a unique opportunity. You get some housing down there. Unique is an interesting word to use. There are a lot of properties that could be unique to someone else,” said Vaughn. “It we approve this for a dollar, what’s the next one?”

Braucks said she thinks the Land for a Dollar program perhaps is more suited to industrial park projects.

“Our Land for a Dollar program is a wonderful program. It’s for our industrial park specifically. I’m supportive of the project in general,” she said. “It seems like the process is a little out of sync.”

The project had broad council support.

“I think this is a terrific development. I’m eager to see it move forward,” she said. “Mr. Siewert has a novel idea here. It’s going to be a really important development in our downtown area.”

“This will help get new families into the community,” said Lisa Leifeld. “The only thing missing after this will be a little grocery store. I’m going to support the land for a dollar in this scenario.

This is huge. I think it’s a wonderf2ul thing for the community.”

Said Fasbender, “This is a wonderful opportunity for our downtown, four our businesses, for our housing. This would allow Luke to move forward with this and present to us in the future. I think from a tax base standpoint, my hope is there’s a domino effect. If we see this building, we’ll see other buildings be redeveloped or updated.

“My hope is it will fill very quickly, and we’ll have 31 families moving to town to help with our economics. I really want to give Mr. Siewert the opportunity. It’s been hard for HEDRA, but now it’s on our table.”

Hastings City Council members and city officials took part in last Monday night’s virtual City Council meeting.