NEW ULM — The Economic Development Authority (EDA) approved a bid of $12,103 for a lot in Block 4 in Milford Heights, Phase One, June 12.

The covenant for the lot requires a home be constructed on the lot within 18 months, but the EDA granted an extension to the bidder to allow three years before completing a home.

A second lot bid request proved more controversial. The EDA received a bid of $13,247.63 for a different lot in Block 4 of Milford. However, the bidder is asking to be exempt from the home requirement. The purchaser has no intention of building a home on this property, but wants to give additional yard space for a different home.

New Ulm Housing Coordinator Heather Bregel said this would set a precedent for others looking to expand their property size.

“If you set this precedent, you are opening it up for other people to come in and do the same,” she said.

Board member Dan Braam suggested tabling the decision. He felt at least other Milford Height home owners would need to be notified about this option. In the past, others have inquired about buying an adjacent lot for this purpose, but were told it went against the covenant.

Braam said the lot sizes in Milford Heights were smaller to keep costs lower, on the belief this would increase sales, but development had stalled.

“Ultimately, it could be the best course of action to complete the development up there,” Braam said.

City Manager Brian Gramentz reminded the board the EDA is no longer the majority stake holder in the development. Changes to the covenant would likely require a vote of all the property owners in Milford Heights.

The board agreed to table the motion until after speaking with the home owners about this change.

In other news, the EDA recently paid the mortgages for both buildings at Garden Terrace. Since that time, the reserve account has grown to a significant amount. The EDA has talked about using a portion of the cash reserve to fund other EDA projects.

Staff proposed three potential projects. The first was a down payment program for Garden Terrace tenants to transition to home ownership; the second was an owner-occupied rehab program; and the third a rental rehab program.

Braam said an incentive program at Garden Terrace could be attractive to workers coming into New Ulm. He said it was a good alternative for those who were not ready to buy a house but might consider it in the future.

Assistant City Manager Chris Dalton said the downpayment incentive can be set up in several ways. The EDA could require the down payment be used for a home in New Ulm.

Board member Les Schultz said he liked all three project ideas and encouraged staff to find a way to do each. He especially liked the owner-occupied rehab program. Schultz said it was linked to the blight homes conversation the city council had last month.

New Ulm has homes in need of repair that continue to deteriorate due to the owners having limited funds. Schultz said a program to assist home owners could solve this problem.

The rental rehab program could help fix up rental space above the downtown businesses. Many of them are not available for rentals because of the cost of getting them up to code. Schultz said during the community visioning program, New Ulm youth expressed interest in living downtown and a rental rehab program could make it possible.

No action was taken on this topic. Staff will continue to look into different program ideas for the EDA consideration.