EDA weighs selling city-owned apartment building

By Chad Koenen

Publisher

Should the Henning EDA sell the city-owned Countryview Apartments or not? That was the crux of a better than 90 minute Henning EDA meeting last Thursday afternoon. At the end of the meeting, a motion to recommend listing the apartment building for $535,000 was passed by a split vote, but was later backtracked by a number of people who voted for the measure to simply have the EDA get input from the Henning City Council, before taking any additional action on the proposal.

The discussion about potentially selling Countryview came after the topic was brought up by Henning EDA chair Andy Eckhoff at several of the past EDA meetings about whether the city should own a business in the community and what a potential sale could mean for other projects down the road.

In order to get a better grasp of what a potential sale could net in terms of overall money, the Henning EDA invited local realtor Clay Houselog to its meeting last week to give a presentation on comparable apartment buildings that have recently been sold.

When comparing other sales, Houselog said the Countryview Apartments could net a sale price on the high side of $560,000.

“I do not think that is out of range,” said Houselog of the price point.

He said people are looking for investment properties and the amount of money the city has put into the property for things like a new roof, heating system and flooring over the past few years, makes the Henning facility an attractive investment property.

“Apartments are really being picked up. People are wanting to buy facilities for apartments,” he said. 

However, when pressed later in the meeting what the city should list the property at for sale, Houselog said he would suggest listing the property closer to $500,000 than the high end of the market. If it is sold, the property would go back on the tax rolls and Houselog said it would generate about $5,000 per year in taxes, which would be divided up between the city, county and school district. 

Eckhoff said that the Henning EDA should not be holding real estate or a business like an apartment building. Instead, he contended, the Henning EDA should sell the property and use that money for additional projects in the city, whether that be another apartment building it could then sell, or provide assistance for something like a daycare. 

“Our job is to spur future development, new opportunities,” he said. “If we sold this it is only as good as our plan with the money. We have to find a way to invest it back into the town, try to bring in new businesses.”

As the Henning EDA members discussed potential plans for proceeds from the sale there was quite a bit of discussion about the need for daycare in the community. One idea would be to start a daycare facility, similar to what was recently completed in Battle Lake or being discussed in Ottertail, as a way to spur economic growth. All of the Henning EDA members seemed to favor having a solid plan of what the money could be used for prior to selling the facility. 

“What more can we offer the community with these funds if we sell,” opined EDA member Stephen Springer. “If we have a solid plan that OK this is what we are going to do then if we agree to sell we agree to sell, but if we don’t have a solid plan…I don’t want to sell if we don’t have a solid plan.” 

EDA member Nathan Thalmann said just because the Henning EDA listed the property for sale doesn’t mean it would need to necessarily sell Countryview Apartments unless its asking price is met. He said the EDA also needs to make sure it has a solid plan on what it will do with the proceeds from the sale, as opposed to giving the perception of just selling the building for the sake of selling it. 

In addition to the apartment building, Houselog said he has been approached by businesses looking for space in the community to open a business in the community. He said selling the apartment building could provide money to help these businesses come to the community for things like no interest loans, or capital to make an improvement to a property. 

“As a taxpayer this would free up a lot of money to earmark for businesses to get them in (to Henning),” he said.

Throughout much of the meeting, several Henning EDA members said they struggled with what should come first, listing the property, or trying to come up with projects that could benefit the city before formally deciding whether to sell the building or not. Up until the past couple of years, when there have been well over $90,000 in upgrades and maintenance projects completed at the building, Countryview Apartments made a profit each year that was then used to fund the Henning EDA and community projects. 

Prior to moving forward with the project, Henning EDA members Glenn Scott and Thalmann both said a meeting should be held with residents at Countryview to explain what is going on and why the Henning EDA could potentially sell the facility. Whether that meeting took place prior to potentially listing the property, or after the decision was made, was also a source of discussion last week.

After voting to move forward a recommendation to list the property for sale for $535,000, on a split vote, the Henning EDA backed off of that recommendation and will ask the city council how it would like to see the Henning EDA to proceed with either selling the apartment building or not, as well as future projects that may be a good fit in the community.