The Park Rapids School Board on Monday approved a 15-year tax abatement on property off Career Path where the Heartland Lakes Development Commission (HLDC) proposes to develop two apartment buildings with 58 units of family and workforce housing.
Mary Thompson, executive director of the HLDC, asked the school board on Feb. 7 to consider providing the abatement to help fund the project, noting that she was making similar requests of the city and county. At that time, Thompson explained that the abatement would only be for the increase in the property value, but would leave the current value of the property intact.
On Feb. 21, Fritze discussed the proposed abatement with the school board. In his estimate at that time, based on the improved value of two adjacent parcels where the Meadow View and Meadow’s Edge apartment buildings were built in 2020-21, this could mean abating $18,000 to $25,000 per year.
Fritze now said he met with personnel with the city of Park Rapids and Hubbard County and learned they are both going ahead with the abatement.
After consulting with Ehlers financial advisors, Fritze said, they projected the abatement would likely cost the school district about $225,000 over 15 years, an average of about $13,000 per year.
Based on state funding formulas, Fritze said, if the new housing units brought two new students into the district, the abatement would pay for itself.
Fritze recommended agreeing to the abatement but setting it at $13,000 a year for 15 years, rather than leaving the amount open to fluctuations in assessment rates. He explained that the district would pay this amount to the county, which would then disburse the abatement monies to the general contractor on the project as their portion of the local match for a state grant.
“The county’s all in. The city’s all in. They’re just waiting on us,” he said, adding that the city and the county each have a bigger stake in the abatement than the school district does.
School board member Colter Diekmann questioned the need for the additional housing, noting that “we have a lot of apartment buildings in this town,” with many residents moving from one building to another.
Bagstad suggested that housing availability may make the difference between them moving within the district or moving to another district.
“If four kids move into this new apartment building, how do we verify that they didn’t just relocate from another apartment building in town?” Diekmann asked. “Is this project going to stop if we don’t give our $13,000 a year? Are we going to get the same effect if we don’t? … You don’t have to spend money on something that’s already going to happen.”
Kim Splett, administrative assistant to the superintendent, said the district can track whether students come into the district from outside.
School board member Dana Kocka noted that other communities are taking a similar approach to funding projects. Fritze added, for example, that Wadena has done a couple projects this way and it has worked in other areas.
Splett said she checked and found that among the students living at Meadow View-Meadow’s Edge, “there are definitely students that did not live in Park Rapids that have moved to Park Rapids from other places.” She confirmed that there are more than two of them.
Kocka’s motion to approve abating $13,000 per year for 15 years for the HLDC’s housing project passed 5-1 with Diekmann opposed.
Robin Fish is a staff reporter at the Park Rapids Enterprise. Contact him at rfish@parkrapidsenterprise.com or 218-252-3053.
