Faribault’s Housing and Redevelopment Authority approved $270,000 in assistance to help a local developer convert a 145-year old downtown building into apartments, but the aid comes with a catch.
Todd Nelson, who owns Faribault-based Dynamic Electric, first brought his request for the $270,000 to the HRA last month, but it decided to postpone a formal decision on Nelson’s request, saying they didn’t oppose the project but worried about its price tag. Nelson recently purchased the old Masonic Hall at Central Avenue and Third Street. A veteran developer, he currently owns 55 units in the city alone, and other properties throughout the area.
The Faribault Masons is one of the oldest chapters in the state, and its hall, located at 230 Central Ave. N, is a historic city landmark. It’s been in the group’s hands since its completion in 1875.
Although many of the Masons wanted to stay in the building, the chapter has suffered a significant decline in membership over the years. Membership rolls, which peaked at 300 around the turn of the century, are now just a fraction of that. Not only was the building getting too big for the Masons needs, its 10,000-square-foot footprint became difficult to maintain.
Nelson purchased the hall with the intention of embarking on a renovation project that would convert the upper two floors of the building into eight apartments, with a ninth located in an adjacent building. The store and pawnshop on the building’s ground floor will remain in place.
Nelson told the HRA that the building is in major need of repairs. In order to return the building to a sound state and transform it along the lines of his vision, he says a full gutting and rebuilding of the upper two floors will be needed, at a cost of about $1 million.
As a part of this process, 36 new windows would be installed, along with a new fire alarm system, sprinkler system and security system. All new electrical wiring, plumbing, mechanical systems, appliances, flooring, drywall, carpentry and painting would also be included.
The HRA voted 3-1 to approve the full funding request with $202,500 a 10-year forgivable loan, while the remainder will be a five-year term loan. The forgivable loan will be made under the condition that four of the apartments be affordable housing.
Under the HRA’s plan, two two-bedroom apartments and two three-bedroom apartments must be rented to families making less than half of median income based on the size of the family. The units can’t be rented for more than fair market rent, as determined by the Department of Housing and Urban Development.
Devised by HRA member Narrin Brown, the plan won the backing of authority member Matt Speckhals and Chairman Brendan Kennedy.
Authority member Richard Olson was opposed, while Councilor Jonathan Wood, who serves on the authority, abstained due to his affiliation with the Masons.
Olson said that he believed the HRA might be able to spend the large amount of money requested for the project more efficiently elsewhere. He also raised concerns that the affordable housing restrictions might be too stringent, although Nelson expressed a willingness to go along with them.
With the city having a housing vacancy rate of less than 1%, addressing the shortage has become an important priority. A downtown resident, Brown said he thinks it’s vitally important that more affordable housing be made available in downtown..