Development map

Litchfield Opportunity Zone Inc. has proposed a 94-unit residential development on the northeast side of the city. The development will be situated on a 24.5-acre site north of Fifth Street between Cottonwood Avenue on the west and County State Aid Highway 34 on the east. Two apartment buildings, villas and townhomes are included in the development.

Developers who say they could offer at least a partial solution to Litchfield’s housing shortage expressed frustration and asked for action on their proposal during Monday’s City Council meeting.

The request received numerous questions and a promise from City Council members of conversations with Meeker County officials about the project, but not the definitive move on a tax abatement plan that Litchfield Opportunity Zone Inc. partners said is essential for their mutli-family residential development to move forward.

“I’ve had these conversations with people on the City Council and city staff, and they go on for a long period of time, and there’s inaction and you miss a window,” David Tysk, president of Litchfield Opportunity Zone Inc., said during the meeting, echoing comments in a letter to city officials in which he wrote, “I have lost confidence that any further progress can be made without the full participation of the Litchfield City Council.”

Tysk presented plans for a 94-unit development on a 24.5-acre site between North Cottonwood Avenue and County State Aid Highway 34 during a City Council meeting in July 2020. The site plan called for two 30-unit apartment complexes, as well as four four-unit patio homes, four four-unit villas and one two-unit villa.

But in discussions since then, Tysk said in his letter, he had “reached an impasse” with city staff on a Business Assistance Application for the development.

Tysk quoted findings from a housing study that showed Litchfield needed more than 144 new housing units before 2025. Those looking for housing in the area already know the problem, he said, because they have commented on social media about the challenge of finding affordable housing.

“I’m sure each of you knows someone who has struggled to find a nice place to rent in town,” Tysk said. “Our company alone has 41 people waiting to rent from us. And our list keeps growing.”

Timing is crucial for the Litchfield Opportunity Zone development, as another round of applications for workforce housing funds opens with Minnesota Housing, Tysk said. He and partner Scott Mann also own Meeker Leased Housing LLC, which is building apartment complexes in Watkins and Eden Valley. Both of those developments received funding through the workforce housing program.

Those projects only moved forward because the cities agreed to tax abatement plans before applying to Minnesota Housing for the workforce development funds, Tysk said. Tax abatement allows a city to abate a portion of property tax to help spur economic development.

“Tonight, we’re asking Litchfield to follow the same process, starting with tax abatement,” Tysk said.

Litchfield is among the cities in the state that receive “preference points” from Minnesota Housing and is on the agency’s preapproved list of cities for the workforce housing grant, he said.

“So tonight, I ask the Council two important questions,” he said. “Will you approve tax abatement? And will you apply for a Minnesota Housing grant?”

City Council members expressed support for more housing, but they also were cautious about committing without additional conversations with Meeker County, which would play a role in the tax abatement proposal, as well.

“I truly believe we need quality, affordable housing,” Council member Ron Dingmann said. “I think it would be important for the city and county (to) see if we can put together a developer’s agreement, something that is going to be acceptable to everybody.”

The Council voted unanimously to set up a meeting with Meeker County representatives within the next two weeks and to, as Council member Darlene Kotelnicki said, “get this settled” in four to six weeks.