Luverne City Council members acted at their March 28 meeting to finance development of the Lopau Housing Addition.
They approved a resolution issuing $1,720,000 in general obligation improvement bonds to make street and utility improvements to the development that will accommodate 24 residential lots.
Northland Securities Inc., Minneapolis, is the city’s independent municipal adviser authorized to sell the bonds by competitive negotiated sale.
Financing proposals will be received on the morning of May 9 for consideration at the City Council’s meeting that evening.
The estimated “true interest cost” is 3.56 percent, based on the city’s current "AA-" rating by Standard and Poor’s.
The Luverne Economic Development Authority owns the lots and will host a public hearing later this year to set lot prices and establish protective covenants.
The lots will be on the market in 2023 and will be available for new home construction in 2024.
LEDA will use a combination of cash reserves and the revenue from lot sales to make bond payments, in addition to special assessments on the new properties and property tax levies.
Construction
Henning Construction of Adrian was the low bidder for the project at $1,480,513.80 (nearly $270,000 lower than the engineer’s estimate of $1.75 million).
Six bids were submitted, ranging from Henning’s low bid to the highest at $2,032,842.
The utility and infrastructure construction project includes an 8-inch sanitary sewer main and 6- and 12-inch water mains to serve the 24 residential lots.
Nineteen lots will be designated for single-family homes and five will be multi-family lots for twin homes (10 units on the north end).
Construction of infrastructure and utilities will start this spring and should be substantially complete this fall.
The existing property will be graded to accommodate a variety of houses, which include slab on grade structures, walk-out basements, garden window basements and full basements.
Lots will be accessed by 36-foot-wide asphalt streets, and drainage will follow curb and gutters, drainage swales in backyards and a storm sewer system that outlets into a detention basin on the east side of the extended North Walnut Avenue.
The detention basin will retain a portion of storm water on site that will drain through a filter before out-letting upstream of Poplar Creek and will reduce the proposed runoff flow rate.
Background
In the fall of 2020, the city paid Lynn Lopau $661,500 for 10 acres of land — $475,000 for the house, garage and two acres, and $186,500 for the rest of the eight acres, including two outbuildings.
After remodeling and updating the home, the city later sold the house, garage and two acres for $498,000 to Greg and Janet Burger.
Future housing needs
According to remarks in the feasibility study for the Lopau Addition, “It is imperative that new lots are available to meet current needs and attract others to the city of Luverne.”
That assumption is based on projected growth and limited residential lots available for sale in the city.
“The city of Luverne is continuing to grow as it is a clean, safe, well-maintained city with an excellent school system and medical network,” the feasibility report states.
“New businesses continue to choose the city of Luverne as their home, and existing businesses are expanding to meet growing needs. As the population of the city of Luverne continues to rise, the tax base continues to grow, and residents spend their money locally to support local businesses, all of which benefits the community.”