Former Clara City Junior High building to be razed in preparation for future housing development – West Central Tribune
MONTEVIDEO — Taxpayers may be off the hook for removing a vacant school building riddled with mold and damaged by water, and Clara City may see 38 new homes in its place.
The Chippewa County Board of Commissioners on Tuesday approved an action to partner with Clara City in relocating the old Clara City High School facility.
The commissioners agreed to take two steps: issue a tender for its demolition and work jointly with Clara City to create a tax increase funding district for the site. Removing the building will pave the way for a 38-unit development, Clara City City Administrator Steve Jones told the commissioners.
Timing matters. Jones said a developer hopes to start construction in September if the vacant buildings are removed in time.
Jones said the goal is to create a tax increase funding district to reimburse the costs of clearing the area for redevelopment. Once the property is developed, a private owner will pay taxes based on the increased value of the site. The difference in taxes between the current assessment and the new assessment would be captured by the financial district from the tax increment to pay for the costs of demolition and any other approved site work.
School property is tax exempt. Board Chairman David Lieser noted that the county, as custodian of state-forfeited property, will eventually find itself liable for the building’s removal due to its unsafe condition. The TIF District could save general ratepayers that cost while helping the City of Clara and Chippewa County meet a need for more housing, he noted.
A 2018 study for Clara City found the junior high facility had widespread mold issues and extensive water damage. Parts of the interior had also been vandalized. A previous inspection identified asbestos in the facility. It is a compilation of three buildings, part of which dates from 1938 and the main part built in 1954.
“A difficult situation”, is how the architect who carried out the 2018 analysis described it. He described the old gymnasium floor as being “like a skatepark” due to water damage.
Jones said he believes the building has continued to deteriorate since the 2018 scan. He said a new inspection will be required to prove the need to remove the building in order to create a TIF district. “I think it will be an easy sell,” he said.
The city launched the idea of developing a housing project on the site by offering it as a property cleared and ready for construction. A developer is considering either a 38-unit project, estimated at over $7.2 million, or a 26-unit project, estimated at $4.65 million.
It is located approximately five minutes walk from the city’s central business district and close to the MACCRAY school campus, parks and churches.
Jones said the developer is confident it can bring the 38-unit project to market. It is considered a market rate project. Due to inflation, he said development cost estimates are expected to increase.
A previous estimate for the removal of the buildings cost around $500,000, according to Jones.
Ehlers and Associates provided the city with a financial analysis of the proposed TIF district. These figures showed that the tax assessment increase was more than enough to provide the revenue needed to repay the costs of preparing the site for the development, Jones told the commissioners.
“We have something there that needs to go,” said council chairman Lieser. “You have to face the music, it has to come down,” he said, while indicating his support for a TIF District.