According to the Gothenburg City Clerk’s office only one building permit was issued for a new construction home in the city in 2020. However, with plans for two new housing developments within the community that number is expected to be much higher for 2021.
The 2021 Housing Project is designed to provide workforce housing in areas which have been declared blighted and substandard by the City. The project is a private/public partnership to offer relief for the severe housing shortage facing Gothenburg.
The project consists of two tracts of land. One is bordered on the east by Avenue M and the other borders Washington Street on the south. The area is currently vacant and undeveloped, and will therefore require significant upfront costs for preparation and infrastructure. To assist with those costs the redeveloper - in this case Gothenburg Improvement Company (GIC) - has applied for TIF funds.
The plan calls for the development of 19 residential lots between the two locations - six in the Washington Street development and 13 in The Crossing development. Single family homes will be built on these 19 lots, which would result in an increase in the number of households in the city.
As mentioned earlier, the development of this property will also require a lot of infrastructure work. Water, storm and sanitary sewer connections to the city mains, as well as electrical lines will be required. Streets and parking will have to be planned for. With the increase in traffic flow that will occur in the project area, the GIC and City expect that replatting - including the addition of internal streets - will be required. The developer (GIC) will be responsible for all on site utility infrastructure installation, except natural gas and electrical lines.
With the City of Gothenburg being the beneficiary of TIF funding, the City is seeking a tax increment revenue bond in the amount of $1.4 million. Those funds would be used to pay for the infrastructure costs outlined above.
“With the Crossing ground especially, we will have to go through and subdivide this property, so nothing is set in stone yet as far as that goes,” said Colten Venteicher of GIC. “At this point the application simply shows that the project has the City’s support.”
Venteicher explained that the goal is to turn $750,000 from the City’s LB840 funds into $2 million. The GIC also applied for a NIFA grant for $250,000 and also submitted an application for a workforce housing grant that may provide up to an additional $1 million.
The GIC is hopeful that they will have a decision on the grant applications by late April so construction can begin on the Washington Street project.
Along with the housing development project the City is also slated to receive several upgrades in its infrastructure this year. Last July the City Council accepted a bid for the nearly $3 million project which will be funded primarily by bonds. Highway Allocation Fund bonds in the amount of $1.3 million will be used toward the cost of street improvements on Avenue I between 16th and 20th Streets. Meanwhile, $1.8 million in funding for improvements of the city’s water supply system will come from General Obligation Water bonds to the city which were approved by the council a year ago.
“The project consists of replacing the pavement between curb to curb with water mains being improved at each intersection from 16th Street to 20th Street on Avenue I,” City Services Director Shane Gruber explained.
Gruber said the majority of the city’s water lines are at least 40 years old and need to be replaced. In order to accomplish that the City has divided the project into smaller sections based on priority. The area on Avenue I is the first section in that project.
It is important to remember that none of these projects will increase taxes for Gothenburg residents. Both the GIC and City have been cognizant of finding other resources to fund the projects at this point; however, the entire city will benefit from both the improved infrastructure and housing developments.