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Council approves LB 840 grant

Council approves LB 840 grant

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Despite having some concerns, Monday night the Chadron City Council — with council member Cheryl Welch absent — approved the application of High Plains Community Development Corp (HPCDC) for $150,000 in LB 840 economic development funds to assist with construction costs for building two new houses and creating a revolving loan fund for future housing.

The decision came following a reconvened hearing that carried over from the council’s July 19 meeting. The hearing was continued to allow time for the LB 840 Citizen Advisory and Review Committee to meet.

At the previous meeting, Northwest Nebraska Development Corporation Executive Director Deb Cottier and HPCDC Director Rita Horse explained that the funds would be used as a basis to use in applying for matching dollars through a Rural Workforce Housing Fund grant from the State of Nebraska. The $150,000 in LB 840 funds will be combined with at least $102,500 in local fundraising for a total $252,000 when applying for the State matching grant, providing a total $505,000 and a 3.4 to 1 return on every dollar the City puts in.

Duane Gardener with the LB 840 committee said the members met last Friday and recommended council approve the application. Among the reason the committee is in favor of the application, Gardener said, is the minimum of $102,500 of local investment included and the return on the City investment.

Gardener continued, pointing out the HPCDC will manage the funds, building two homes that will be sold, and buyers must have financing in hand before closing. It’s believed the houses will sell for more than the building costs, and the LB 840 fund will grow as money from the sale will be returned for additional use. All housing must be used for working families, not retirees nor individuals, with a maximum price tag of $285,000 for each home.

If the grant application to the State is unsuccessful, Gardener pointed out, no funds will be drawn from LB 840. However, the approval of the application means the funds are now set aside and cannot be used for other projects.

Council member Joe Johndreau posed the question as to whether the $150,000 would be used, even if the State decides it will only provide a portion of matching funds, for instance $100,000. Horse explained when applications are submitted, commitments are requested and expected to be filled. If the State grants only $100,000, it’s expected the full $150,000 will still be filled. The only way the $150,000 would not be used, Horse said, is if the State chooses to not provide any funding.

Cottier noted there is a negotiations term after the State grant it approved, during which it would be determined if the funding provide through the grant is enough. If it isn’t enough to do what’s planned, the committee would have to decide whether to accept it.

Looking at a housing study done at the end of 2020, Zoning/Building Official Janet Johnson noted there have been five houses built within the city limits in the last five years, and seven have been built outside the city limits. The study, Johnson said, shows the city would need 252 units, comprised of single family and rental units.

Since producing the report, Johnson said there have been two housing permits come in — one within the city limits, one outside — and one general commercial space turned into residential.

Mayor Mark Werner described himself as a “free market guy,” but offered his support for the LB 840 funds application as there is a demand for housing, but also folks who choose not to move to Chadron because the houses are not up to standards. He further added if one or two houses are built every year, the money continues to compound and add to the local tax base.

“In my opinion,” Werner said, “this is the best opportunity we have had or are going to have in the near future for jump starting our housing.”

Johndreau agreed with Werner that the need is there. He’s had conversations with people, he said, and valued the opinions he’s had about this application. He doesn’t like that the money is contingent upon matching dollars and is something of a “one way” street. He’d like to see the money go back into the LB 840 fund if there’s not a dollar-for-dollar match from the State, or that the $150,000 will nearly drain the account but he wants to give this plan a shot. Based on how it all unfolds, he noted, would play into how his opinion goes with future applications.

“That’s not a threat,” Johndreau stressed. “That’s just my obligation when we’re talking about tax dollars.”

Council member Keith Croffut said much of the plan seems “pie in the sky,” but the need is worth the overall risk.

Council member Miles Bannan was enthusiastic in his support, and that if there is a button to push that states “help build a new home,” he would push it every time.

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