Sawtooth Cottages Update

The Northern Communities Land Trust yesterday circulated a notice that, without a change in financing, the Sawtooth Cottages Development cannot go forward. Here is what they said:

“In a nutshell, NCLT has determined that it's not feasible for NCLT to act as the developer of the land, infrastructure and roads at the site without a tremendous amount of tax increment financing, and that such support is unrealistic. NCLT remains confident in its ability to raise approximately $700,000 in affordability gap funding for 10 affordable homes; however, this amount isn't enough to make the homes affordable with land and infrastructure costs.

NCLT has sent a letter to the EDA outlining that the only way NCLT is able to make these homes affordable (around $850 per month) to a household earning less than $30,000 per year would be for the land, road, and utility costs associated with the affordable homes to be eliminated. It is our hope that the EDA and the City of Grand Marais can come up with a creative solution to allow this to happen.”

This will be discussed at the EDA meeting today, at 4 PM. This meeting will be held in the city council chambers.

This news is both bad and good. Bad, because it is indicative of the problems faced in the present real estate market, locally and elsewhere. It will mean that a mix in the development in terms of low, moderate, and higher priced homes will likely be deferred depending on how the lots sold at market rates are received.. It will also mean that the city has to step up and into a more active role by way of participating in tax increment financing.

It is good because it will get the most needed component of housing, the entry level housing, out there on the front end of the development. The area is in sore need of quality, entry level housing, and this appears to be the only way that will happen. For that reason alone this change deserves the wholesale support of the community. It will mean that young families will have chance for a home of their own in our community.

This situation puts the burden on those members of the real estate community that serve in public office, particularly on the city council and the EDA, to recognize that their duty is to the public and not to their real estate firms. A situation like this can very easily leave folks wondering whose interest is being served as matters are being discussed. The remaining lots will likely be offered to private developers. Mayor Larson is not a developer and not likely to become one. Gunflint Realty, however, is and with Tim Kennedy on the city council with his record regarding conflicts of interest, and Mark Sandbo, also of Gunflint Realty on the EDA, with his own record of conflicts of interest, the situation must be watched carefully.

In a fit of full disclosure of my own conflict of interest in this matter, my family fully supports this since it is likely that they too may be able to afford a home in Grand Marias.

True