UPDATE: DaCola Rumor Mill

Okay, so I get odds and ends quite often with what is happening at City Hall. Here are a few things I have heard over the past week that is interesting.

UPDATE: Councilor Neitzert was kind enough to give us updates on these items. Thanks Greg!

Affordable Housing. I guess a major affordable housing project that was supposed to provide housing to middle income professionals (condo like apartments for sale) got botched and now will have to be sold as regular housing because the fire walls were built wrong and put the project in a different classification. This is unfortunate because the project got around $300K from affordable housing and now it is out of that classification. I hope to hear more details about what exactly happened.

UPDATE: Affordable Housing Solution AHS was building the “Field of Dreams” project at 14th and Sycamore (across from Casey’s) and was getting pretty far into it when they went in I think to replat and found out that the firewalls were not 2 hour walls so they couldn’t replat and sell off as individual units.  It was a major goof, and it likely had something to do with the transition from old to new people there and also this being one of their first forays into this type of project.  There are multiple players involved, someone goofed, exactly who is not entirely clear, but that’s somewhat of a internal battle.

The bank giving them the financing froze the money for a while and made them get quotes on what it would cost to make them 2 hour walls and still be sellable as the intended single units.  That pricing came in and was way too high.  They then all had to make the best out of a bad situation and looked at either apartments or doing condos.  The lesser of the evils is condos but even that has challenges.  Condos are harder to get financing for as a home buyer and now they will need to have an association to maintain.  They have an agreement with a local bank to basically hold the mortgages on the initial ones until they get at least 50% owner occupied and then they can start selling the mortgages onto the open market (they will be conforming mortgages then).  The city essentially gave them time to bring them a workable solution, and as long as their solution is something that we still get paid back, we will approve it, they may have got to that point already.  We were going to and will be a silent second mortgage that gets paid back when the owner sells the home, i.e. instead of paying 170k they pay 150k, we pay 20k and the silent mortgage is on the property and we’d be paid back on their later resale.  There is also state home loan down payment assistance and a forgivable phased out down payment as I recall too.  Its just going to be owning a condo instead of your own place, so you will own basically the space in the entire building instead of your own unit platted into its own property.  Not optimal but they are trying to make it work.

Golf Contract. Rumor has it that Landscapes Unlimited did purchase equipment from Dakota Golf Management for the city’s original offer of $475K. Unfortunately, even if that is true, the city will have to reimburse LU for the purchase.

UPDATE: Landscape bought the equipment for 475k.  Recall that we transfer what was left in the DGM operating account into the Landscape operating account, and Landscape writes checks out of that.  It is an account in their name but it is OUR money kept in trust.  So there is no reimbursement needed.  Landscape bought the equipment out of the account in their name, but again its our money.  So ‘we’ bought the equipment, although again it is owned by them ‘in trust’ until the contract is over at which point they hand it to us.  I didn’t like this odd model which was my objection to the contract, but that is what it is.

Heritage Park firehouse. There has been speculation if the firehouse that is scheduled to be sold to Stone Group Architects was sitting on parks land or regular city property. My guess is that it is probably on city property. Why is this important? Because if it sits on parks land it must go to a public vote before any parks land property can be sold.

UPDATE: They researched and the firehouse is on city property but it has never been park property so no state law issues.  Stone group is buying the land and building and will hold clear title to that parcel.

I would hope in the contract for selling it we will have a stipulation about what it can be used for and reversionary clauses.  I would think we would.



3 comments ↓

#1 "Very Stable Genius" on 01.23.18 at 5:30 pm

Speaking of affordable housing, the Trump, Thune, Noem, and Rounds tax cut did a number on future affordable housing construction by the way:

https://www.nytimes.com/2018/01/18/business/economy/tax-housing.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

#2 LJL on 01.23.18 at 6:10 pm

The number of apartments compared to first time homes is astounding. It’s clear to me, developers are purposely driving people to rent rather than own. There’s too little competition in the housing manufacturers.

#3 Bald-n-Surly on 01.24.18 at 8:20 am

Coming out of the recession, a large swath of people, primarily millennials, were hesitant to buy because they saw their parents or acquaintances go underwater and get stuck or foreclosed. It changed the mindset for a generation. That will probably move back to single family homes but it increased demand for multi-family.