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Developer expresses interest in building 12 duplexes in Colfax with an estimated value of $2 million

By LeAnn R. Ralph

COLFAX — A developer says he is interested in building 12 duplexes in the East View residential development that would have a value of a little over $2 million.

Kevin Peterson of K&D Builders out of Menomonie spoke to the Colfax Plan Commission October 2 about his interest in building the duplexes.

Instead of positioning the duplexes so they face Dunn Street, Peterson’s idea is to have a duplex “subdivision” with six lots on each side, a street running down the middle of the development, and the backyards of the duplexes facing Dunn Street.

The duplexes would be built in the Phase 2 portion of the East View residential development, and the lots in Phase 2 are platted as 138 feet wide.

Peterson said for “maximum development purposes,” the lots only would need to be about 104 feet wide.

If the lots were narrower, then there would be room for six duplexes on each side of the street, Peterson said.

Peterson said he has built similar developments in a number of different communities, including Cameron, Durand, Mondovi, Chetek, Prairie Farm and Eau Claire and is currently working on a project in Barron.

The duplexes would have two bedrooms, one bathroom, a two-car garage and would be built on a slab with no basement, he said.

Nancy Hainstock, plan commission member, asked about a storm shelter in the subdivision.

Peterson says he does not include storm shelters, and in 30 years of building such developments, none of them have suffered any major storm damage.

More land

Colfax only owns the first section and would have to buy more land, said Lynn Niggemann, village administrator-clerk-treasurer.

Rand Bates, director of public works, wondered if Peterson would be willing to build the first six structures along Dunn Street and then continue on to the backside of the development.

Peterson said he prefers to build all the duplexes at once and have the street down the middle between the two rows of duplexes so that the development has more of the look and feel of a subdivision.

The duplexes are easier to rent if they are in a subdivision configuration, and then, too, the occupants would not be “looking at the trailer court,” he said.

Value

Gary Stene, village president and chair of the plan commission, asked about the value of the completed duplexes.

The structures would have a value of $150,00 to $185,000 each, Peterson said.

The units would rent for $750 to $850 per month, and each building has central air conditioning, natural gas heating, a patio and front porches, he said.

The village could consider using Tax Increment Financing District (TIF) incentives and work with the developer on Phase 2, Niggemann said.

“We want to reward the first developer,” Stene said.

“We would like for something to happen. We want to make something happen. But it has to work for the village and for the developer,” he said.

Peterson agreed that a developer’s agreement would have to be beneficial for him and for the village.

“We are just starting the ball rolling,” he said.

Timeline

Dave Hovre, plan commission member, wondered about the timeline for building the duplexes.

Peterson said he would plan on building all 12 of the duplexes at once.

The street and sewer and water does not need to be installed before construction can begin, Peterson said, adding that his construction crews only need to have the grades to work from, and they can start building.

Peterson noted his crews do not install plumbing, electrical or heating, and it is typically about six weeks from the time the bulldozer prepares the site until tenants are moving into the duplexes.

Road trip

Stene said he would like to be able to see some examples of what Peterson has built.

The project in Barron is in different phases of construction, Peterson said.

Peterson urged members of the plan commission to “see what’s there and get a good feel for it.”

“I think we should pursue it further,” Hovre said.

Property taxes

One issue that gives Peterson pause, however, is the high property taxes in Colfax.

Colfax has the highest property taxes of any municipality in which he has built, Peterson said.

Peterson wondered if the village could reduce the property taxes on units he builds.

Stene said he did not believe the village could reduce property taxes for an individual owner, “but we can probably do some incentives.”

Peterson said Lake Hallie is the cheapest for property taxes of the municipalities where he has built projects.

The equalized value in Colfax has been stagnant for quite a few years, although it has increased some this year, Niggemann said.

Following the Great Recession that started in 2007, the Village of Colfax’s equalized value decreased to around $44 million and stayed at that amount for several years.

The state of Wisconsin has certified Colfax’s equalized value for 2016 at $50.5 million.

The village also has had very little economic development over the past ten years to add to the tax base.

When the equalized value decreases, the mill rate increases.

What’s next?

After Peterson left the meeting, plan commission members discussed what the next step should be.

Bates noted Peterson had found out about the East View development while driving through Colfax on his way to Barron and saw the sign by the village’s well house near Kyle’s Market.

At a value of $175,000 each for 12 duplexes, that amounts to a $2.1 million development, which would generate around $50,000 per year in property taxes, Stene said.

The village’s developer’s agreement for East View requires the developer to guarantee the minimum assessed value of the land and improvements will be not less than $175,000.

One of the next steps will be to get an idea of the cost for water, sewer and street improvements for the proposed duplexes, Stene said.

Village officials also should set up a meeting with members of the Schindler family to see about acquiring more land, he said.

The existing lots for East View were part of the farm owned by Jim and Mary Schindler.

A group of people from the village board and the plan commission also should drive to Barron to see the development Peterson is currently building, Stene said.

Stene also suggested Niggemann contact other communities where Peterson has built projects to find out what their experiences have been.

“I am cautiously optimistic,” Stene said.

The village should not secure the land without an agreement from K&D Builders on moving forward, Niggemann said.