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EDA sells the last of its spec homes

NEW ULM — The New Ulm Economic Development Authority is no longer in the housing business. During a special meeting on Friday the EDA board accepted a purchase offer for 633 Pfaender Drive.

This house was one of over a dozen spec homes constructed by the EDA and is the last to be sold. The buyer offered the board $148,000 and asked the EDA to pay 4 percent ($5,920) toward their closing costs.

Last month the EDA set the sales price for the house at $152,900. This offer was $4,900 less than the asking price. With the additional expense of EDA closing costs and the Buyer’s closing costs the EDA is looking at net proceeds of $137,080.

In October, the EDA had accepted a $150,000 offer for the spec home at 629 Pfaender. At that time the asking price for the homes was $159,900.

The property at 633 Pfaender Drive has been on the market for over a year without any offers. EDA Chair Charles Schmitz accepting the offering and taking the loss to move on. “We want to get out of the housing business,” he said.

Board member Daniel Braam agreed with the decision to accept the offering. He admitted the EDA’s effort to create homes in the Milford Height development had not turned a profit.

“We went in with best of intentions but the economy was against us,” he said.

Les Schultz also was in favor of accepting the offer and moving on. “We haven’t been able to sell this property no matter what we’ve done,” He said. “Its not our fault but we need to move on.”

The board voted to accept the offer by a 4-2 vote.

Board members Susan Fix and Michael Schwartz voted against accepting the offer at this time. The two opposed accepting this offer without first presenting a counter offer, that could reduce the EDA’s loss on the project.

City Manager Brian Gramentz argued the EDA development project was not a complete failure. The project did not turn a profit, but it is not uncommon for EDAs to give away land for free and take a financial hit in order to spur further growth.

Gramentz said since the EDA began their project other nice homes have been put into place. The EDA was able to sell land last summer that will now be used for a twin homes and town-homes.

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