NEW ULM — Brown County Commissioners unanimously approved setting a public hearing at their Dec. 16 meeting to consider a tax abatement for Rebound Real Estate for the Oak Hills Living Center project Tuesday.

The New Ulm Economic Development Authority (EDA) sold the ownership rights of Garden Terrace Apartments and a vacant lot on the 1000 block of North Garden St. to Rebound Partners for $7.3 million.

The sale produced income for the EDA to start and maintain projects that support home improvements, or benefit those looking to sell their homes, or first-time home buyers. Small business grants can also be approved with EDA income.

In an Oct.16 letter to Brown County Commissioners, Jay Scott of Garden Terrace New Ulm 2, LLC wrote that Garden Terrace is partnering with Oak Hills Living Center on a new, 39-unit senior independent living facility adjacent to Garden Terrace apartments.

Oak Hills will enter into a long-term lease with Garden Terrace 2, LLC, the property owner and developer. Oak Hills will operate the senior housing facility. Oak Hills contains the right for Oak Hills to purchase the property and facility in the future, according to Scott.

Without a tax abatement, the project is simply not financially feasible. The property tax abatement is needed to support the project and make it financially feasible for Oak Hills. All tax abatement proceeds will be paid directly to Oak Hills to support their operations. None of the tax abatement proceeds will go to the developer, according to Scott.

He said Garden Terrace is also seeking tax abatement from the City of New Ulm in a separate request.

Scott added that in his review of the proposed request on behalf of the City of New Ulm, he concurred with their assessment that the tax abatement request is essential to the financial feasibility of the project.

Oak Hills has requested 10 years of tax abatement assistance (reimbursement of the new local property tax) from the City of New Ulm and submitted a similar request to Brown County, according to David Drown Associates, Inc. Public Finance Advisor Shannon Sweeney.

He added that the new senior living facility would be owned by a local investor group and leased (with a purchase option) to Oak Hills who would operate it.

The county assessor’s office estimated the market value of the project at $6,534,900. Based on that value and 2025 City and County property tax rates, the increase in City and County property tax is estimated at $58,386. The estimated County property tax increase is $27,629.

“The service Oak Hills does is going to be more and more needed and more as we go along, as the baby boomers retire here,” said Commissioner Tony Berg.

“I certainly support this 100%. I think the public benefit Commissioner Berg touched on is extremely important. This gives more of an opportunity to age in place. Looking at the value increase, I think it’s a win-win for everyone,” said Commissioner Dave Borchert.

Oak Hills board chairperson Barb Dietz said Oak Hills has not signed a lease with Rebound Partners for the building project, but the abatement is a critical issue Oak Hills is working with Rebound Partners on.

“I echo the sentiments of Commissioners Borchert and Berg. It’s a well-deserved project. I’ve supported Oak Hills in the past,” said Commissioner Brian Braun.

Approval came on a motion by Berg, seconded by Borchert.