Downtown Faribault

The City Council Tuesday discussed ways it can encourage redevelopment downtown that encourages housing above retail/amenities following a tour of a new Division Street apartment building. (People’s Press file photo)

Faribault’s City Council kicked off its first in-person work session in months with a visit to the city’s newest multi-family housing development followed by a discussion on housing downtown.

Undeterred by the COVID-19 pandemic, construction crews finished up work on the Hillside Apartments earlier this month. The three-story, 44-unit complex isn’t considered upscale, but it’s on the pricier end of the city’s rental market. For the tour, property manager Bryan Collins of INH Properties was joined by the project developer, Mac Hamilton, the company’s president and CEO.

With a central location and abundance of amenities Hillside Apartments bears strong similarities to a project Hamilton completed in Owatonna last year. Known as 111 Vine, the 54-unit, five-story apartment complex now sits in the heart of the city’s downtown district.

Hamilton also completed the South Pointe Apartments, a 37-unit complex which sits on Owatonna’s south end, near the Highway 14 and Cedar Avenue exit. The success of South Pointe, which sold out even before it opened, encouraged Hamilton to embark on the Faribault project.

As with the Owatonna projects, Hamilton maintained he “spared no expense” on Hillside Apartments. That pleased council members, who got a full tour of the complex’s residential, storage and recreational spaces. Councilors saw several apartment layouts, which vary widely in the facility. On the smaller end, simple studio apartments rent for $840 per month, while a spacious two-bedroom apartment can cost as much as $1,315.

While the project wasn’t eligible for affordable housing grant dollars, the city of Faribault established a Tax Increment Financing district to facilitate its development. In addition, the development is on formerly city-owned property that was sold to the developer.

Providing more housing options in the downtown district is the cornerstone of the city’s Downtown Master Plan. Approved by the Council last December, the plan is focuses on replacing industrial/retail facilities with housing and amenities. In the city’s vision, that would serve the dual purpose of addressing the city’s housing shortage while helping the district remain vibrant. Along Central Avenue, the city estimates that one in five storefronts are either vacant or have been “converted to unsupportive use.”

In order to accommodate the increased housing, the vision includes improving walkability, adding bicycle routes, and greening up downtown with extra parks and green spaces. The city hopes to utilize the Straight River to bring amenities to downtown. Still, parking has been a challenge for city officials over the years. The city’s ad-hoc Parking Commission concluded far more parking is needed to address shortages at peak times, but attempts to deal with the issue have been fraught with controversy.

How to tweak

After returning to City Hall, the council held a marathon work session lasting more than two hours. One of the key topics discussed at the work session was just how the city might be able to modify its ordinance to help developers interested in downtown housing.

That discussion wasn’t triggered by Hamilton’s project, but by local Developer Todd Nelson’s recently approved proposal to convert the upper two floors of the former Masonic Lodge into apartments. Councilors insisted that Nelson reduce the number of apartments in the complex from nine to eight, so as to enable additional amenities, including a dedicated laundry room and onsite trash pickup.

Even that eight-unit complex required the city to issue a variance, as the site would normally be allowed to have just five apartments under a city ordinance strictly limiting the number of residential units in downtown buildings. That formula was implemented in response to concerns about downtown parking, at the recommendation of a design consultant hired by the city. Councilors coupled that with a provision requiring parking units to accompany new residential units.

City Administrator Tim Murray told the council that the latter provision was repealed to encourage downtown building owners to add apartments to their upper floors, boosting cash flow — but that the formula has remained.

Councilors previously expressed interest in loosening or modifying the formula. However, some expressed initial hesitation to revisit the ordinance at Tuesday’s meeting, arguing the case of the former Masonic Lodge was a unique circumstance.

“The way (the current ordinance) is put together, I think it’s sufficient for what we’re trying to achieve,” said Councilor Jonathan Wood. “At 230 Central Ave., Todd Nelson had a unique opportunity with those hall ceilings.”

Murray urged the council to make modifications if it was at all interested in doing so. Murray said that just because the council didn’t face a pressing need to change the ordinance doesn’t make it the wrong time to consider tweaks.

“I would say the time to change the rules is when you don’t have applications in front of you,” he said.

Although not willing to ditch the reasoning for the ordinance, the council expressed a belief that the ordinance could be drastically simplified, while still ensuring that downtown housing remains high quality and parking issues stay under control.

“I’m all for something simpler for our building owners and developers,” said Mayor Kevin Voracek. “It would be great for them to be able to put down tape measures and say, ‘this is what I can put here,’ without having to do math.”

The current formula bases maximum unit count on parcel size and number of floors, or on floor space, whichever is more restrictive. Nelson’s project fared poorly under the first formula, as 18-foot cathedral ceilings enabled the construction of lofts but weren’t counted as full floors.

To simplify the code, several councilors suggested dropping the first requirement and basing it strictly on square foot. Councilors Wood and Elizabeth Cap also suggested reducing the square foot required for each unit, enabling the creation of smaller units.

Reach Reporter Andrew Deziel at 507-333-3129 or follow him on Twitter @FDNandrew. © Copyright 2020 APG Media of Southern Minnesota. All rights reserved.

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