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Thief River Falls housing project at standstill

Civic leaders in Thief River Falls are trying to head off a potential $400,000 deficit in public funding that has stalled the start of construction on a 104-unit apartment complex.

Civic leaders in Thief River Falls are trying to head off a potential $400,000 deficit in public funding that has stalled the start of construction on a 104-unit apartment complex.

Last year, the Thief River Falls City Council, Thief River Falls School Board and the Pennington County Commission agreed to split the $400,000 local matching investment of an $800,000 developer incentive under a special state Workforce Housing Grant Pilot Program, which was created in 2014 by the Minnesota Legislature to address housing issues in Roseau, Warroad and Thief River Falls.

However, before construction began on the West River Falls Estates, commonly called the Noper Project, local officials and the low-bid developer, DW Jones of Walker, Minn., learned the project was subject to Minnesota's prevailing wage regulation.

"That would negate the benefits of the grant money," City Administrator Larry Kruse told the Herald. "The cost of using the state grant would be more than the benefit."

The three governments last week considered a plan, proposed by the developer, to finance the $400,000 shortfall locally, through a tax abatement program for the development, which consists of two 52-apartment buildings.

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The County Commission set a public hearing for 6 p.m. July 28, while the City Council scheduled a hearing at 5 p.m. on Aug. 3. The School Board will consider setting a public hearing date at its Monday meeting.

"When it was $400,000 from the state and $400,000 local, everybody was in favor it," Kruse said. "Now we're looking at $800,000. When you double the amount, it raises some concerns."

The three boards also discussed a potential solution that would avoid the extra local investment, according to Kruse.

Officials at the Minnesota Department of Employment and Economic Development, which administers the pilot project, said it may be possible to make the state grant funds work without the prevailing wage requirement, according to Kruse.

"We're hoping we can work that out," he said.

If the issue is resolved quickly, he said, it's still possible construction could begin this summer.

In another matter, the three boards are discussing the extension and expansion of a residential tax abatement program for new homes.

Currently, the city and county are partners in an affordable workforce housing program, which offers a three-year tax abatement to people who build new homes valued up to $160,000. The program is set to sunset-or end-at the end of this year, according to Kruse.

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Officials may extend the program and have invited the school board to join the partnership and expanding the maximum value requirement to $200,000.

The City Council also will have a public hearing on the matter on Aug. 3, the same day as the apartment complex hearing.

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