Changes to REDI Program Help Address High Demand for Affordable Housing in Watertown
The lack of housing in Watertown has been well-documented as the area continues to grow. But developers say building workforce housing is not easy without some help in reducing the costs of construction. State, city, and economic development leaders say they are aware of the problem and are taking action.
To combat the problem, The Governor’s Office of Economic Development has recently revamped its South Dakota REDI (Revolving Economic Development and Initiative) Fund to include low-interest loans to developers for workforce housing projects.
“I want to thank community leaders in Watertown for their visionary approach to filling the workforce housing gap,” said Governor Kristi Noem. “Strong communities start with strong families, and families belong in a home. This project puts Watertown in a good position for future development.”
Until recently, the REDI Fund has been known as South Dakota’s flagship financing tool that is available to start-up firms, businesses that are expanding or relocating in South Dakota, as well as local economic development corporations. The only projects allowed under the program have included land purchases; site improvements; construction, acquisition, or renovation of a building; or the purchase and installation of machinery and equipment. But now that list includes workforce housing.
“The changes to the REDI Loan Fund program will reduce the costs of construction and bring much-needed workforce housing to the community,” said Chris Schilken, Executive Director of the Watertown Development Company.
Along with addressing the city’s need for affordable housing, the development is expected to have a significant impact on the local economy.
Watertown Mayor Sarah Caron said, “The city supports the new development because it’s designed to increase the number of affordable housing units in the city and stimulate economic development, meeting two of the city’s community growth initiatives.”
Berg Group, a firm in North Dakota that develops and manages a diversified portfolio of projects, including housing, will be the developer. They have partnered with the Watertown Development Company to complete the first phase of the project by the second quarter of 2022.
The City of Watertown also plans to adopt a Tax Increment Financing Plan to further reduce the cost of construction.
“Fortunately, we are working in a community that understands the critical importance of investing in housing and helps make this possible by assisting with developing the infrastructure for this project,” said Scott Houle, Chief Operating Officer of Alliance Management Group, LLC. “The Plains will provide a high-quality housing option to cost-burdened families, opening new doors and fostering a stronger community through its unique design and inclusive amenities.”
The idea for The Plains Apartments transpired through conversations with another Fargo developer Jesse Craig of Craig Development, LLC who has several re-development housing projects currently in progress throughout Downtown Watertown. While working on these projects, Craig recognized the need for even more workforce-style housing and introduced the Berg Group to local leaders in Watertown.
This new development will be located on the north side of Watertown, at 1604 4th Street NE, along Highway 81, and will consist of 216 units arranged across three buildings with each building having seventy-two units. There will be a mix of studio, 1-bedroom one bath, 2-bedroom two baths, and 3-bedroom two-bath apartments. Amenities include controlled access, security cameras, an oversized elevator, grilling area, pet wash station, pet park, cardio room, 9 ft ceilings, private balconies, in-unit laundry, stainless steel appliances, modern fixtures, and heat included in the monthly rent.
Based on estimates from a 2015 report from the National Association of Home Builders (NAHB), the project is expected to create over three hundred direct and indirect jobs and generate over $6 million in tax revenue over twenty years. These benefits will continue to benefit the community in the years to follow, providing a lasting positive impact on the community.
About the Watertown Development Company
The Watertown Development Company (WDC) is a non-profit organization established to own and operate buildings, lands, and development areas for the economic benefit of Watertown. For more information visit www.wdcsd.com
About Alliance Management Group, LLC
Alliance Management Group will be the property managers of the project. For more information visit https://www.alliancemgmtgroup.com/.