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Housing project passes

But plan reduced from 38 to 17 lots

October 8, 2017
Chuck Hunt - Register Editor , Faribault County Register

The Blue Earth City Council voted to proceed with a new housing development near Lampert Lumber on the northeast side of the city.

But, it is not the full version of the project some of the council members wanted to see.

A first vote to proceed with the larger, 38 lot project, failed on a 4-3 vote.

Council members John Huisman and Glenn Gaylord (who had made the motion and second) and mayor Rick Scholtes all voted yes to proceed. However, council members Russ Erichrud, Marty Cassem, Wendy Cole and Dan Warner all voted no.

Right after that vote, Warner moved and Erichsrud seconded a new motion to proceed with a smaller version of the project which would be 17 lots.

That motion passed unanimously, 7-0.

The low bid for the full 38 lot project came in at $1.796 million from Holtmeier Construction. The low bid for doing just the 17 lots was $974,591 from Brunz Construction of Madison Lake and that was the one accepted.

There had been a lot of discussion about the proposed project and how many lots to construct before either one of the votes was taken.

"Our other housing developments are all filled up," councilman Glenn Gaylord said. "It took a while, but I think there is no argument that we do need it (a new housing development area). It will fill up. And I think we need the bigger project because it will result in cheaper lots."

The construction costs with doing all 38 lots was listed at $42,300 per lot, while doing just 17 was calculated at $57,500 per lot.

However, both city administrator Tim Ibisch and mayor Rick Scholtes pointed out the council can decide to sell the lots at just the cost of the assessments on the property, which would be roughly 20 or 30 percent of the actual construction cost.

"I calculated that if we do all the lots, and then assess them at 20 percent of the cost on a square foot basis, we can sell them for between $8,000 and $25,000 depending on the size of the lot," mayor Scholtes said. "But we don't have to decide that now, we will still be able to determine the price of the lots and how to market them after we decide tonight to move ahead."

All of the council members seemed to be in favor of keeping the price of the lots to as low as possible, to make sure they sell.

Councilman Warner questioned whether the council had to take the lowest bid in either case (38 or 17 lots) and seemed to indicate he would like to take the bid for 17 lots that came from Holtmeier Construction and was at $1.073 million, higher than the one from Brunz Construction.

However, city engineer Wes Brown said that while the city has the right to take a higher bid, they need to be able to justify the reason, and he did not see that happening in this case.

Councilman Huisman made one last plea for doing the full 38 lot project right before he made the motion to do so, which failed.

"As city leaders we need to have the foresight and courage to do what this city needs," Huisman said. "That means doing the full project."

Other council members did not agree, and felt starting with fewer lots was better, and that they could always build more when needed.

City staff had recommended to the council to proceed with all 38 lots.

In other business at their meeting last Monday, the council:

Heard a request from the Blue Earth Fire Department about raising their yearly contribution to the Firemen's Relief (Pension) plan to $2,300 per year.

The council tabled any action until a future meeting, but will take action before the 2018 budget is set.

Received a liquor store report that broke down sales by day and by hour for Sunday sales. The report showed some improvement in Sunday sales over the summer, but the council agreed it was too early to tell how it was going.

The council briefly discussed changing some of the hours for both week days and weekends, but no action was taken.



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