NORTH MANKATO —  

 A decision was delayed on a proposed student townhome development in Upper North Mankato after it drew criticism from nearby residents concerned about property values and noise and from those opposed to subsidizing rental projects.

Landowner Richard Black and developer Dave Drummer hope to build an initial eight-unit townhome development at the northeast corner of Lookout Drive and Carlson Drive, near Benson Park and next to the Rolling Green subdivision. Up to 25 units could eventually be built.

“We feel this would be needed for the (South Central College) campus,” Drummer told the Port Authority Wednesday. The developers are seeking a 10-year Tax Increment Financing subsidy of $183,000 — assuming all the units are built — to cover part of the cost. A 25-unit project would have a market value of about $2 million.

TIF takes the increased property tax revenue generated by a new development and gives that money back to the developer for a period of time. 

The Port Authority is the city’s economic development board. Mayor Mark Dehen and Councilman Billy Steiner sit on the board along with five citizen representatives.

City Councilman Bill Schindle said he’s been a big supporter of the Port Authority but believes they should not provide a subsidy for rental projects.

“If the project is such a good project it should stand on its own.”

Schindle said subsidizing a rental project puts it at an unfair competitive advantage over other privately owned rental properties.

And, Schindle said, he believes nearby homeowners are justified over concerns that their property values would decline by having student housing nearby.

Lower North Mankato resident Chris Corley said he didn’t think the project truly qualified for TIF, which has a requirement that without the subsidy the project couldn’t otherwise be built.

“To say this wouldn’t be built in Greater Mankato without TIF is deceptive.”

Corley also criticized the 7:30 a.m. meeting times of the Port Authority, saying residents who work and or have kids can’t easily attend the meetings.

Drummer said the amount they could charge for rent — about $400 per bedroom — is not enough to make the project feasible without the subsidy.

Drummer, who is a partner in building and operating Stadium Heights — a student housing complex near MSU — said they have strict contracts and tight security with renters to ensure they do not have parties and create noise. He said renters agree to allow security into units at any time and to pay fines for violating policies. “If we see a keg rolling in, we take it,” Drummer said of their approach at student complexes.   

Port Authority members Jim Kirschbaum and Greg Abbott raised questions about the location of the complex and whether there would be high demand from SCC students. Kirschbaum noted the project would be a mile-and-a-half from the SCC campus, across Highway 14.

Drummer said the property is on a bus route which would be attractive to students and noted that his MSU property is also that far away from campus and full of student renters.

But some Port Authority members wondered if student demand for nearby rental would be strong enough considering many SCC students are non-traditional students who have their own families or already live in the area.

Abbott asked if SCC had studies showing what the demand would be for the townhomes. Port Authority Executive Director Wendell Sande said he wasn’t sure, but said college officials know their is a need for it.

Abbott noted that a similar private housing project built in St. Peter near the Gustavus campus had a written agreement with the college that it would provide enough student renters to fill a certain percentage of the units.

“If SCC is supportive of this (project) where is that kind of agreement?” Abbott asked.     

Several residents from the Rolling Green subdivision, adjacent to the proposed townhomes, attended the meeting.

Free Press Publisher Jim Santori, who lives in Rolling Green, said residents knew nothing of the proposal until the past couple of days and noted they didn’t have access to the detailed packet of information that Port Authority members get.

While Port Authority members get detailed paper packets a few days before meetings, the packets are not posted on the city’s website. Only a brief meeting agenda and minutes from past meetings are on the website.

The city does put its council meeting packets online.

The townhome project will be discussed further at a future meeting. Sande said he will try to get more information from SCC officials on demand for housing and perhaps have a college representative at the meeting.