A 50-unit apartment building is in the works for downtown Hutchinson.
A developer may purchase a Third Street Northwest plot along the Crow River south of Subway and Taco John's. The site, formerly the location of the old Cenex fertilizer plant, was purchased by the Hutchinson Economic Development Authority for $351,000 in 2006. It was then cleaned up and prepared for development. The city is now asking for that same amount for the property.
"It's really more the structure ... we're trying to work out," Hutchinson Economic Development Director Miles Seppelt told the City Council Tuesday.
The developer has asked for assurances it will be first in line while it conducts its due diligence research on the site.
"They're going to be spending thousands of dollars putting their financial models together ... and looking at the environmental aspects," Seppelt said. "They want to make sure they're not going to spend that money and then lose out on the chance to purchase that plot."
The building could have more than 50 units depending on the outcome of site planning. The plan is likely to have a three-story building with garages on the ground level.
Seppelt said the project would develop an empty lot, add housing and strengthen the city's center if it moves forward.
"We're going to get more people living in and around the downtown area," he said. "That's all part of the city's downtown plan."
To make the project work, Seppelt told council members, the city would need to approve tax increment financing, which is a subsidy for building projects.
"It's needed to make the project economically feasible for the developer," Seppelt said, adding that $10 million will be spent on the site if the project moves forward.
If tax increment financing is approved, the developer would be required to reserve 20 percent of units for income-based housing.
Seppelt expects to bring a purchase agreement to the city council at its next meeting.