Townhome proposal approved
By Kevin O’Brien
Construction will begin later this year on a two-phase townhome project after Abbotsford’s city council voted Monday to approve a land sale and developer’s agreement.
It took three separate votes to finalize the deal with Straight Shot Investment Group, authorizing the sale of 11 cityowned lots for $1 apiece in exchange for a commitment to construct buildings worth $600,000 on each lot.
Before the final vote was taken, Alds. Dennis Kramer and Jim Weix proposed an alternate motion to have the city sell only six lots to the developer, just to make sure the development was a safe bet.
Noel Felix of Straight Shot told the council he would not be interested in such a proposal, and the motion was voted down, 2-6, with Kramer and Weix providing the only yes votes.
A second motion to approve the original 11-lot agreement passed 6-2, with Kramer and Weix voting no.
A third vote had to be taken in order to amend the start date of construction, pushing it back one month, from July 1 to Aug. 1. Kramer ended up voting yes for that motion, saying it didn’t really matter since the overall deal was approved.
Weix, who voted no on both of the last two motions, said he did so because of the complaints and concerns he heard from residents in that area. He said people living to the east and south of the development worry about having more multi-unit housing nearby.
“They were promised housing, not apartment buildings,” he said. “I’m just repeating what I’ve been told.”
Felix and others said there are several key distinctions between apartments and townhouses, including the ability for the occupants to own their own home.
The first phase of the project will begin with the six westernmost lots, which start on Fourth Avenue and go about halfway down the block on Swamp Buck Drive and Porcupine Lane. The second phase would include the four lots closest to Third Avenue, plus one on the north side of Swamp Buck Drive.
Felix said the goal is to build lower-cost townhomes — those with five or six units per building — closest to the Northside Apartments and higher-valued fourplexes closer to the single-family homes in the Sportsmen’s Addition.
Ultimately, though, he said the market will dictate what kind of townhomes he ends up building on the 11 lots. Felix said he would like to pre-sell as many fourplexes as possible, but if there aren’t enough buyers, he will build more five and six-unit townhomes to be rented out.
When asked, Felix said they plan to charge about $1,000 per month for rent.
Jennifer Blair of Scherrer Construction, which will be building the townhomes, said each unit will range in size from 1,200 to 1,500 square feet. All of the units will be two stories high, with three bedrooms and either an attached or detached garage. Based on construction estimates, Felix said he would need to sell each unit in a fourplex for about $260,000 — which is on the high end of what homes sell for in Abbotsford.
At the same time, Felix he wants to be able to offer homes for less than $200,000 so that working families are motivated to move here.
“Our goal is to make these affordable,” he said.
Addressing a housing need
Ald. Frankie Soto noted that a recent search of homes for sale in Abbotsford revealed that only one was on the market.
“That’s what’s happening in Abbotsford,” he said.
Felix said he doesn’t think there are many rental units available either, so people have limited options if they want to live in Abbotsford.
Townhomes like the ones he is planning to build are common in larger cities, he said, and are a good way to bring in families.
“It’s not a new way to live,” he said. “It’s just newer to these smaller communities.”
Ald. Weix, however, said the residents who have contacted him say they feel like the city is reneging on a commitment to build single-family homes between the Northside Apartments and the Sportsmen’s Addition.
“I’ve had phone calls; people are not happy with what’s going on up there,” he said.
Resident Jim Colby, who lives across Third Avenue from where the townhomes will be built, said the proposed development goes “against everything promised by the council in the past.” He said townhomes are nothing more than apartments by another name.
“More conditions have to be set in stone about this proposal,” he said. “It is very unclear what will end up here if approved.”
Ald. Mason Rachu, however, noted that “not one person” came to the city’s planning commission with a proposal to buy one of the lots and build a single-family house on it.
Tony Morice, the real estate agent hired by the city to market the lots, said his agency sent out mailers to “four dozen contractors in a nine-county area” and got 48 inquires, but only a handful of those got to the conversation stage.
In the end, he said Straight Shot Investment was the only company to put forward a workable proposal.
“If you don’t hit a certain price point, it’s not feasible, and I believe he’s trying to do something that’s affordable for the community,” Morice said.
DPW Craig Stuttgen said his father-inlaw lives in a townhouse in Colby, and it’s very similar to a house.
“He owns his place,” he said. “It’s by every definition a single-family home, but he shares a roof and a driveway with somebody else.”
Still, Ald. Weix wanted to see what develops on the first six western lots before having the council commit to selling all 11 to one developer.
In response, Felix said a high demand for housing in the area means he needs to have the ability to market all the lots at once — something he can’t do if he doesn’t own them.
“There’s nothing to say that the second stage couldn’t start while the first stage is still going,” he said.
Ald. Dennis Kramer, who lives in the Sportsmen’s Addition, questioned Felix about his background in building townhouses and wanted to know the names and net worth of his other investors.
Felix said he’s completed several single- family units around the country, and he recently returned to his home state of Wisconsin because of the housing demand here. He said this is one of his first housing projects in the state.
When it comes to other investors, Felix said none are from the immediate area, but some live within a two-hour radius of Abbotsford.
Ald. Kramer cited the lack of local investors and experience by the developer when he made his motion to only sell six lots to Straight Shot.
“I wish you all the success in the world, but you have to understand, it’s our job as council people to look out for the taxpayers of the city,” he told Felix.
Ald. Kramer said he would also like a commitment from the council to build at “least one row of single-family houses facing Third Avenue.”
Ald. Mason Rachu pointed out that Felix is required to obtain financial backing from a bank in order to proceed with the project.
Under the terms of the developer’s agreement, Straight Shot will need to obtain a $4 million letter of credit from a bank for each phase of the project in order show that it has the money needed to complete construction.
Felix said the city will be kept informed about the progress of the development at every step.
“All of the contractor’s bills will be sent to the city as they’re paid so you know they’re getting paid along the way,” he said.
Still, Ald. Weix noted that the city will have to pay its real estate agent $2,000 per lot upfront for helping to arrange the sale to Straight Shot. For all 11 lots, the city’s cost will be $22,000.
However, because the development is located within a TIF district, 100 percent of the tax revenue on each new building will be kept by the city. The developer’s agreement approved by the council requires Straight Shot to build a minimum of $600,000 in assessed value on each lot, which will equate to $15,000 per year in taxes based on the current mill rate.
“If he builds on one lot and something is standing there for two years, we’ve already made money,” Stuttgen said.
The developer’s agreement also stipulates that any undeveloped lots will be returned to the city, free and clear, after three years.
Ald. Soto said the council should listen to the planning commission, which recommend approval of the proposal, and warned against doing anything that would cause the developer to walk away from the project.
“This whole thing could be wiped out,” he said. “There could be nothing built up there, and we’re going to sit with it.”
