With financing for the second phase of Austin’s Courtyard Apartments soon to be in place, Kermit Mahan is turning his attention to another matter: the creation of a housing development that will address the needs of the starting plant worker.

Friday, April 14, 2000

With financing for the second phase of Austin’s Courtyard Apartments soon to be in place, Kermit Mahan is turning his attention to another matter: the creation of a housing development that will address the needs of the starting plant worker. He calls it Murphy’s Creek, and right now the price tag is somewhere between $16 million and $17 million.

However, this time the Housing and Redevelopment Authority director isn’t working alone to address Austin’s serious lack of affordable and rental housing. In this case, Mahan is working with the Hormel Foundation and Apex Austin, a volunteer group that has been tasked with deciding how to spend – and match – the foundation’s $5 million challenge grant.

Apex Austin members already have heard about Murphy’s Creek from Mahan, Podawiltz Development Corp., which is proposing the project, and their own housing committee, chaired by Jay Nelson and Paul Johnson. On Tuesday, the Hormel Foundation heard about the project.

As proposed, the development would include 88 townhomes and 63 single-family homes for a total of 151 housing units. The units would be a mixture of market rate and "affordable" units for rent, purchase and rent-to-own. The primary goal of the development is to answer Austin’s needs for affordable housing while maintaining economic integration in an attractive development.

Mahan told HRA board members and staff Wednesday that he was encouraged by the foundation’s response.

"It was a very intense work session," Mahan said, "and we cleared up a lot of matters. It is evident now that the foundation also would like to see a piece elsewhere in the community for single-room occupancy units as well … And, although the foundation didn’t actually endorse anything, they do believe the Murphy’s Creek project is worthy of further consideration."

Mahan said the foundation board had appointed a subcommittee to examine the numbers and the nuts and bolts of the project.

In addition to the Hormel Foundation board, Mahan explained, he’s looking at as many as six other funding sources.

"Remember, the numbers are all driven by the rules of the Minnesota Housing and Finance Agency, because they are the ones who recommend the funding mechanisms," the HRA director said. "We’re bringing a lot people together, and it’s not easy, because each entity has its own requirements."

In other matters, the HRA board held a public hearing on the bonding for the second phase of the Courtyard Apartments. Board members OK’d the bond underwriters’ plan to sell the bonds that will finance the project within the month, provided the interest rate is acceptable to the HRA. No one from the public attended the meeting.

Phase II will be very similar, although not identical, to Phase I of the Courtyard Apartments. Phase II will have 81 units – three more than phase I – and Mahan expects the average rent probably will be close to $690 a month for both phase I and II by 2003. In the new building, Mahan said, rents will be about 2 percent higher.

The HRA director is hoping the phase II apartments would be ready for occupancy by May 2001. There is a waiting list of about 200 for the apartments.

"We’re in a very strong position," Mahan said. "We’re responding to pent-up demand. We don’t have to create a market, we know the need is there."