City EDA approves sale of home in Milford Heights
NEW ULM — The New Ulm Economic Development Authority (EDA) accepted an offer for one of their two spec houses in the Milford Heights addition. The house at 629 Pfaender Drive received a cash offer of $150,000.
The EDA had set a sales price of $159,900. With the construction cost and carrying costs for the property the EDA will take a net loss of approximately $14,500 on the sale; however, the board believed this was the best option.
Board Chair Charles Schmitz opposed the EDA continuing to hold onto these properties and continuing to sink money into advertising them.
Board member Daniel Braam agreed. He said a cash offer with a fast closing would leave the EDA with only a single house on the market.
The board briefly met in closed session to consider the option in private. After the closed session the board chose to accept the offer of $150,000 for 629 Pfaender Drive on the condition the deal close on Nov. 3.
With the sale of this property the EDA is down to a single spec home at 633 Pfaender Drive. During the same meeting the board made a motion to offer buyers the option of purchasing 633 Pfaender Drive “as is” or with finished basements and an increased sale price.
The “as is” price for the house is $159,900. With the finished basement the cost of the house rises to $183,155. The board hoped this option would make the spec home more attractive to buyers.
Housing Coordinator Heather Bregel estimated this quote for the basement improvements would last until 2018.
The board agreed to set this new pricing option for the remainder of 2017 and revisit options next year.
The board also accepted a quote from Perfectly Placed Home Staging to provide staging for the house at 633 Pfaender Drive. The board agreed to stage the house for six months at a cost of $100 a month with an additional $550 staging fee.
Later in the meeting the board agreed to extend their contract with Century 21 Realty for the Milford Heights Subdivision by an extra 90 days. The Century 21 Realty contract for the Milford Heights Subdivision is set to expire at the end of the month. Century 21 has had the contract on spec houses and vacant lots since September 2012.
The extension would include updated photos for the spec house at 633 Pfaender and hosting an opening house.
A market feasibility and financial study will be conducted in New Ulm on the needs for addition hotel rooms in New Ulm. City Manager Brian Gramentz said Cobblestone Hotels requested a study be conducted to determine if they will proceed with a hotel/motel project in New Ulm. If Cobblestone does bring a hotel to New Ulm they would reimburse the EDA for the cost of the study; however if they decide not to proceed the EDA will be out the cost of the study.
Schmitz said even in the event Cobblestone does not proceed after the study any competing hotel company could use the study.
Board member Les Schultz said Cobblestone has been to New Ulm several times to talk with city staff about a motel/hotel project. Their initial analysis suggested New Ulm could support two new hotels. Before they will move forward Cobblestone wants a market feasibility study to confirm the need for additional hotel space.
Schultz supported the study. “We all know we need a new hotel in this community,” he said. The need for space during festivals and sporting events is high. “I think we need to move forward on this.”
Braam said hotel studies requests of this nature are not uncommon. Other communities have done similar studies upon request with success. He believed a hotel study would provide similar insight as the recent housing study conducted by the City.
“I would hope based on their interest in our community, that it would bear fruit as well,” Braam said.
The board authorized City Manger Gramentz to spend up to $12,000 on the Hotel Market Feasibility study. Gramentz estimated the actual study would take 60 days. Once the study is conducted it the findings will be available to the public.
Economic Development Corporation Coordinator Brian Tohal gave a brief report on NUEDC actives in September. Tohal said several of his meetings were related to business retention. He did highlight a proposal offered to Easy Energy Systems. Easy Energy System is a manufacturer of small scale ethanol plants that fits on the back of semis. The idea is a farmer would buy these units make their own fuel with the corn they produce. NUEDC offered Easy Energy Systems the opportunity to expand into the former Palm Beach Marinecraft building.