The October 20 CMBA Government Affairs Committee Meeting featured our regular Builders Roundtable with Area Mayors.  Mayors from St. Cloud, Waite Park, St. Joseph and Foley took part in the periodic roundtable discussion of building and development related taxes, fees, regulations and planning.

CMBA/Rochester Area Builders Lawsuit – As the meeting began, it was noted CMBA and the Rochester Area Builders, in collaboration with the Upper Midwest Law Center (UMLC), have jointly filed a lawsuit to un-do two builder-related provisions of the 2024 Minnesota “Mega” Omnibus Bill. UMLC has its own funding, and is prosecuting this case at no cost to CMBA or its members. The case is not expected to go to court until next year, and there may be a decision next summer.

The lawsuit seeks to nullify the bill’s costly and onerous new energy standards for home building (estimated $44,000 per home), and the bill’s new and administratively burdensome 14-point independent contractor test.  CMBA builders have expressed concerns about both of those provisions.  The lawsuit alleges the Mega Omnibus (over 1,400 pages) violated the Minnesota Constitutional requirement that bills be limited to a single subject.  Minnesota’s Supreme Court has ruled in favor of similar lawsuits concerning the 2024 Mega Omnibus Bill.

Housing First Minnesota (HFM) Update – Nick Erickson

• Energy Code: Erickson is meeting with the new commissioner of the MN Department of Labor and Industry (DoLI) to get a target date for state building code changes. Erickson continues tracking Energy Code regulations and meetings, and indicated new Energy Code regulations could be years away.
• Lawsuit: Erickson reported HFM is expecting to receive a court date shortly for its lawsuit against the cities of Corcoran and Dayton regarding building permit fee overcharges.

Building and development-related matters discussed by our area mayors:

• St. Cloud – Mayor Jake Anderson
  The city recently passed building fee increases effective 2027.  The city had not increased fees for several years, and felt they needed to be increased to better cover the city’s costs.  A St. Cloud housing study indicates 17,000+ housing units are needed over 15 years, and progress is currently behind target. St. Cloud’s 2027 budget proposes a 3.75% property tax levy increase.  The city is working on zoning changes for data centers to define appropriate locations and conditions, including potential use of utility bonds. The city is concerned that if a large data center project fails after utility expansion, the cost of maintaining the expanded utilities could fall on St. Cloud taxpayers. The Herberger’s building downtown was sold at auction in June to a Twin Cities investment group, and a rental assessment study of the downtown Lady Slipper Lot is complete. There is concern about long-term owners who refuse to sell or develop their properties inhibiting downtown revitalization. St. Cloud 33rd Street Crossing: The Environmental Assessment is scheduled for completion in 2029; funding and coordination with state and federal governments remains uncertain. Stearns County administration and law enforcement is expected to leave downtown St. Cloud in 2029; the city is planning how best to utilize the resulting available lots.
  
  
• Waite Park – Mayor Ken Schmitt
  Heritage Crossing Senior Apartments are nearing completion.  The apartment complex contains 66 units and is valued at $11 million.  The city hopes the apartments will attract seniors who might currently be living in family homes, freeing-up affordable housing for young families.  The new 48-unit Viewpoint Apartments are open ($11.6 million valuation), located next to Woods Nursery by Fleet Farm. partnered with Central Minnesota Housing Partnership to produce Small City Development Program funding. The city is updating  zoning standards to help spur more development. The St. Louis Christian School expansion ($1 million valuation). Discount Tire has a new store near Home Depot. There have been a couple of cannabis dispensary remodels. New commercial construction was $4.13 million. New commercial additions were $20.4 million.  The city is expanding and remodeling its Public Safety and City Hall campus, doubling the size on the same footprint.  The city has been able to do that without raising property taxes because the Minnesota Legislature approved the city’s request for a sales tax to cover the first $20 million of the project’s bond. The new facilities will open November 18-19, with a public grand opening to follow at a later date. The city’s Ledge Amphitheater is doing well, and the city has just completed a five-year extension of the management company’s contract.
  
  
• St. Joseph – Mayor Adam Scepaniak
  The city is implementing a new rural residential ordinance allowing larger lots (1–9.9 acres) with independent sewer/water on the city’s fringes to spur more housing. The city will lower SAC and WAC hookup fees by approximately $1,000 each starting in 2027 to encourage more housing development. St. Joseph is planning a new police station at the former Casey’s gas station site and expanding the fire hall to create a public safety campus. The city continues working with BKB Group to draft the layout for the new police station. St. Joseph Industrial Park: Currently at 95–99% capacity; the city is looking to expand it by another 80 acres.
  
  
• Foley – Mayor Brandon Voit
  The city is moving forward with its South development – the first new development in ~20 years, with 17 lots available at $45k–$50k each, creating homes in the high $200ks to low $300ks. The city approved a parcel split for a potential 46-unit apartment building, expected as early as next spring. The North neighborhood infrastructure improvements (new pipes, curbs, sidewalks and trees) are completed with assessments to the home owners, and the city is planning a new water treatment facility at a cost of $20+ million. Foley is working with Benton County Economic Development to develop an RFP for the former courthouse/garage lot looking at potential mixed-use or commercial development on the site.
  
  
• Infrastructure Funding: Cities and developers struggle to afford subsurface infrastructure (water/sewer), which is often overlooked in favor of "ribbon-cutting" pavement projects.

For more information:  CMBA Government Affairs, 952-923-5265, Steve Gottwalt

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