City right to pull plug on failed projects
It wasn’t all that long ago that development was rampant in the Minot area and the question was whether or not there would be adequate infrastructure to support the new development.
Obviously those days are behind us. The majority of entire subdivisions remain unconstructed; some planned retail centers have seen no building activity at all; rumors circulate widely about which major business is going to shut down next.
Not all projects are the same, however. There are limitations to what the City of Minot can do when it comes to entirely private sector failures.
However, public-private projects and those funded, even in part, by public money are in a different situation. The city has not just the right but the obligation to ensure these projects are complete, meet the negotiated standards, or else taxpayer money must be recovered.
The City of Minot is correct to assert it is taking action to address local developer 16th Crossing, LLC’s failure to perform under a Community Development Block Grant-Disaster Recovery Development Agreement.
In 2013, the city entered into an agreement with 16th Crossing, LLC, to spend $5 million in CDBG-DR funds to provide public infrastructure improvements to a proposed development in southeast Minot. Although not required to do so by the development agreement, the city also spent an additional $951,194 from other funds on public infrastructure for this development.
In exchange, 16th Crossing was to construct 178 townhomes and provide 350 manufactured homes on properties located in the 55th Crossing West neighborhood. A minimum of 51 percent of the townhomes and mobile homes were to be set aside and offered at a price affordable for low- to moderate-income buyers. The development agreement called for completion of the townhouses and mobile homes within two years.
Of the 178 townhouses, the city lists 34 as completed and occupied, with 15 occupied by low- to moderate-income households, or 44 percent. The city stated the developer contends an additional 15 townhouses are either built or being built and are unoccupied.
The city council approved a motion on Monday to terminate the agreement with the developer effective Friday and seek to recover the federal and city dollars spent on the project from the developer.
This probably isn’t the last conflict in which the city will have to engage as a result of failed projects. It’s good to see Minot recognize that this is an unfortunate necessity, and to move ahead.