Apartment project gets new life

The Williston City Commission is in the process of selling Lot 2 of the Bakken Heights Subdivision to George Gaulker with Valley Realty Inc. of Valley City, to build two 36-unit apartment complexes in the former Cimmarron Trailer Park.

This project that has a targeted completion date of late 2009 was discussed during Tuesday evening's regular commission meeting. Valley Realty Inc. is the same development company that had partnered with the Marcil Group of Fargo to construct apartments on a 17-acre section of the old trailer park. Valley Realty Inc. now intends to purchase 6.14 acres of Lot 2 for $58,259 under the condition construction begins by Nov. 1.

There are contingencies, however, regarding the sale. First, Lot 2 needs to be re-platted and rezoned, which has begun. The area is zoned R-5, Mobile Home Court, and C-3, Restricted Commercial.

Secondly, the project is eligible for a Tax Increment District 5 (TIF) that does not exceed $300,000. The TIFF would be in accordance with a general development plan and a renewal and development plan called the Bakken Heights Development Plan.

The TIF would cover costs established under the development and renewal plan, as well as some or all costs for water, sewer and street improvement. Demolition and site clearing costs were estimated at $50,000 and includes removing existing infrastructure such as roadways, aprons, pad sites, curbing, gutters, sidewalks, substrates, light fixtures and underground utilities, man holes, replacement and compaction of excavated fill material and removal, separation and hauling of existing storage building and slab.

The costs relating to storm sewer and sanitary sewer and water service were estimated at $110,000, while sidewalks were estimated at $5,000, rewiring and refurbishing street lights along 32nd Street at $10,000, and overlaying 32nd Street, replacing curb and gutter and installing aprons at $65,000.

Other estimated costs include $35,000 for contingency and interest allowance, $15,000 for general conditions and engineering cost and an estimated $10,000 for bond administration cost. Under the TIF agreement, the city can issue tax increment bonds to fund eligible costs of development.

Payment of the $300,000 has a six-year amortization schedule with a 6.25 percent interest rate. However, payment over the first 12 months are on interest only.

The developer's agreement states the TIF is to be taxed as a general real estate tax, and annual tax increments collected are to first pay the principal and interest on the tax increment bonds. All other increments collected goes towards paying the principal and interest of special assessments levied on the TIF.

Gaulker, who participated via telephone conference, agreed to all the terms and said the final plat for the project is to be presented at the end of the week or early next week.