Hoiseth says delays in the process meant they couldn't break ground this fall on North Broadway.

    With APG Development not able to break ground this fall as they’d initially hoped on the first of two planned market-rate apartment buildings on North Broadway in Crookston behind Casey’s General Store, CHEDA Executive Director Craig Hoiseth said Tuesday that the developers “have backed away” from investing in the project, at least for now.

    Hoiseth told the Times that the news doesn’t mean APG won’t kick their plans into gear again when the ground thaws next spring. But for now, the project that involved the construction of two, 36-unit buildings and garages – one building first and then the second when market demand warranted it – is in limbo.

    A process that was perhaps more convoluted than it needed to be played a big role in APG not being able to get some concrete poured before freeze-up on the first building, Hoiseth said.
    “Quite frankly, we didn’t do a great job with them,” he said. “We put them through some merry-go-rounds, and now they’ve backed away from us.”

    Soon after APG first came forward with their proposal, the City Planning Commission approved two variances related to the construction of the buildings on the property, and the Crookston City Council followed suit. But a tax abatement that was part of the deal amounted to a “business subsidy,” which required a second round of approvals by the commission, and the project scope also had to be approved in relation to the nature of the “land use” and the City’s comprehensive plan. It all added up to a time crunch that made breaking ground this fall impossible.

    Hoiseth tells the Times he expects APG to decide on whether to move ahead next year with the project in the coming weeks or months. APG and CHEDA have a completed purchase agreement involving the developer’s purchase of the parcel for $90,000, he adds, but it hasn’t been executed.

    In addition, Hoiseth said, the legal fees related to all of the red tape involved with the apartment project have piled up. As part of the continued discussion that will lead toward CHEDA’s 2020 budget being approved, he said CHEDA’s attorney bill tied to the APG proposal have topped $2,000 alone, not including whatever the City has had to pay in legal fees. “The legal fees are starting to mount up on us,” Hoiseth said. “I talked to (City Attorney Corky Reynolds); it’s a lot to absorb.”

    If the trend continues, Hoiseth said it would be wise to set aside more money for legal fees in future budgets. “If we’re going to face these costs on projects going forward, it needs to be considered when putting together a budget,” he said.