New Ulm City Council voted to prepare a tax abatement program for the new Garden Terrace building.

NEW ULM – On Tuesday, the New Ulm City Council authorized staff to prepare necessary documents for a Garden Terrace tax abatement program.

The program allows the city to rebate a portion of property taxes back to a property owner to help offset development or redevelopment costs. In the case of Garden Terrace, the tax abatement would assist in the construction of a new apartment building.

Rebound Real Estate is planning to construct a new 39-unit, three-story apartment building on a vacant lot near the two existing Garden Terrace buildings. Upon completion of the new building, Rebound plans to lease the building to Oak Hills Living Center, which operates a senior living facility on an adjacent property.

The tax abatement would assist the developers in covering excessive building costs for the project. The new Garden Terrace building will incur extra costs for structural support related to the soil conditions.

New Ulm Community Development Director David Schnobrich said projections for the project indicate a financial need of $862,092. Anticipated property taxes would produce this amount over a ten year period.

This tax abatement project also requires the participation of Brown County.

“The county and the city are required to go through the same approval process,” Schnobrich said.

Councilor David Christian asked if Brown County was willing to participate.

City Manager Chris Dalton said the county would likely agree to the tax abatement project because it benefits Oak Hills Living Center, which is an asset to Brown County as a whole.

After Brown County Commissioners approve the acquisition of the tax abatement, Brown County and the City of New Ulm could advertise public hearings that are required before the program is approved.

Councilor Christian made the motion to approve staff and project consultants to prepare the tax abatement documents. The motion was approved by the council.

Also at the meeting, a public hearing was held regarding the final plat for the Garden Terrace Second Addition. No comments were received and the plat was approved. The final plat approval was needed for the construction of the new Garden Terrace building.

Councilor Eric Warmka asked if the developers were still planning to start construction on the new building this year.

Schnobrich said construction could start in December. Due to the marshy soil in the area, the developers feel heavy equipment would operate better in winter compared to spring or fall.