Kasson hears presentation on apartment complex project

KASSON — In 18 months, there could be a big chunk of additional housing in Kasson.

Wednesday night, the Kasson City Council heard from developers from the Hamilton Real Estate Group, which is requesting help from the city in developing a 47-unit market rate apartment building in Southwest Kasson near Lion's Park.

The developer plans to buy 2.5 acres of land at a net price of $0.55 per square foot – initially paying $2.55, then getting a $2 rebate after completion of the project – with an option to purchase an additional 2.5 acres for a second apartment complex.

ALSO READ: A 70-foot tree and a dream: Hayfield Holiday Fest Delmont Martin couldn't look at the giant conifer in Hayfield without thinking of lights and decorations.
In exchange for 10 years of property tax abatement assistance from the city of Kasson, Dodge County and the Kasson-Mantorville School District, the developers would follow the state's affordable housing rental rule, meaning a minimum of 19 units would be rented at the 60% of the area's median income.

Construction of the apartment complex will cost an estimated $7,774,000. The development plan includes 18 1-bedroom units and 29 2-bedroom units generating an estimated annual income of roughly $554,000.

Mac Hamilton and Ryan Nolander of Hamilton Real Estate gave a presentation to the city council outlining how the company would first need investors to put up about 25% of the cost. The developers would need to be able to show a return on investment for the investors, and part of the financial plan to make that happen is the property tax abatement and the real estate refund.

The company has already built successful apartment complexes in Owatonna, Faribault and, recently, in Byron, Hamilton said.

Speaking about the complex built in Byron, Nolander said, "We see a need here in Kasson similar to that."

The plan, if approved by the city, would break ground sometime in April or May 2022, and be ready for occupancy in March or April 2023.

Nolander added that the developer would like an option on a second 2.5 acres next to the initial land, located between the water tower and Lion's Park in southwest Kasson.

"It sounds like there's demand for an additional 47 units in Kasson," he said.

A question from the city council asked how well the apartment units in other projects have been occupied.

"All of them are 100 percent," Hamilton said. "They will be affordable to people who have reasonable jobs."

In addition to the discussion on the apartment complex, three other items on the agenda pointed toward growth in Kasson.

First, the city council approved moving forward with a 500,000 gallon water tower to replace the 125,000 gallon water tower that sits near the fairgrounds.

Second, the city approved the orderly annexation of land formerly belonging to Golden Kernel Farms. The 57.94-acre tract is south of Dodge County Road 34 and U.S. Highway 14 on the west side of town. City Administrator Tim Ibisch said the land would likely be used for a combination of residential and commercial development.

Third, the city council approved the orderly annexation of the Schuette property on the west side of Minnesota Highway 57, just south of Kasson-Mantorville High School. Ibisch said the property would likely be used for the same purpose, with the 64.89 acres being split between commercial lots along the highway and residential lots behind that.

Finally, the city council approved the levy and budget for 2022. The levy will increase 6.85% over the 2021 levy. Mayor Chris McKern said at that level, if a home's valuation has not changed, taxpayers would see a tax bill roughly equivalent to the one they received this year.