Council votes for Zimmerman proposal on N. Chestnut

     It’s taken several meetings and considerations, but the Monticello City Council voted 4-2 during their Oct. 2 meeting to approve a proposal by Norm Zimmerman to construct a new house on the lot at 224 N. Chestnut St. Council members Brian Wolken and Rob Paulson were opposed.

     The city purchased the property earlier this year following a fire that destroyed the home previously on the lot, owned by Al Hughes.

     To date, the city has invested over $21,000 in the property with purchasing the lot, demolition, asbestos removal, property closing costs, etc.

     Zimmerman proposed to pay the city $20,000 for the lot. He presented plans to build a new craftsman-style house with a carriage-style two-story building on the back lot. Construction is planned for 2018.

     The city previously received proposals from Zimmerman and Tom Harmon, who lives next door, and has lived next door for over 30 years.

     City Administrator Doug Herman explained that if Tom and Lisa Harmon apply for the city’s partial tax abatement program, the city would not see property taxes back until year six. Under the program, up to $75,000 in improvements to the property are not subject to taxation. Harmons estimated a $50,000 improvement with an addition to their home. With Zimmerman’s proposal of a $200,000 new home, the city would start collecting taxes right away on at least $125,000.

     The gross taxes on a $200,000 home would bring in $4,006.76 ($1,579.07 to the city). Gross taxes on a $50,000 addition would bring in $1,001.69 ($394.77 to the city).

     “We’ve spent a lot of time talking about tax dollars and revenue,” said Council member Dave Goedken. “But in the end, we have to do what’s best for Monticello.”

     Tom Harmon addressed the council and said an addition onto his home would have no bearing his neighbors’ property, good or bad, versus a new home.

     Council member Tom Yeoman said he was contacted by residents throughout the city that expressed interest in seeing a new home built.

     “We have to look at every taxpayer in the entire community,” Yeoman said rather than singling out those who reside on N. Chestnut, “and do what’s best for Monticello. We have a fiduciary responsibility to the taxpayers in this community.”

     Harmon said the council is also running on an estimate on what Zimmerman’s house will be assessed at, not knowing the final tax benefits.

     “My property value has been depressed for 38 years,” he said of residing next to a nuisance property.

     “I guarantee you that a new house will improve your property value,” offered Yeoman.

     Goedken acknowledged that this was not an easy decision to make.

     Following the approval of the vote, Herman will draw up a binding development agreement. A public hearing will be set for some time in November for additional comment on the agreement before the council approves it.

In other city business:

     • The council held a public hearing and approved amendments to the city’s Urban Renewal Area and Plan to now include the property at 218 W. First St., owned by B&J Hauling and Excavation, Inc.

     The Monticello Planning & Zoning Board also reviewed and recommended approval of the plan.

     The total new valuation of the property would increase by $300,000, or seven times the current valuation. Taxes would increase from $1,076 a year to over $7,000 a year.

     “That building is in pretty rough shape,” commented Goedken of the current property. B&J is expected to demolish the existing building and build, in its place, a commercial building housing three separate businesses. “A project like this is in need of being done,” added Goedken.

     • The council held a public hearing and approved a development agreement between the city and B&J Hauling. The agreement offers B&J Hauling a $5,000 TIF grant upon completion of the demolition of the existing building, and a $15,000 TIF grant once the commercial building is completed and ready for individual build-out. The three owners inside the building will also be eligible for tax rebates as well, based on the value-added improvements.

     The city could collect $70,000 in taxes over a 10-year period. The city would also be paying B&J Hauling $20,000 in grants, and approximately $37,500 in rebates, leaving the city with $12,500 in tax receipts.