Timing matters as Montevideo, Minnesota, breaks ground on needed rental housing project

Tom Cherveny, West Central Tribune, Willmar, Minn.
·4 min read

Apr. 8—MONTEVIDEO — City officials in Montevideo hosted a groundbreaking ceremony on Monday for what is believed to be the largest rental property development in the community in decades, and the timing couldn't be better.

The 38-unit Thunder Hawk apartment complex is expected to open for occupancy in eight to nine months. That puts its opening ahead of the project to build a state veterans nursing home in Montevideo. That project, which just recently received federal funding, will create an expected 110 full-time equivalent positions.

Marv Garbe, president of the Montevideo Economic Development Agency, led the effort to develop the veterans home in Montevideo. He said it is hoped that construction can get underway this October. It is expected to require about 18 months to construct.

The new Thunder Hawk apartments will help meet a growing need for housing in the community, according to Ben Dolan, newly appointed community development director. There is a need for both rental housing and single-family homes. The new units may help free up some single-family homes by attracting homeowners ready to put home care responsibilities behind them, he said.

A 2019 housing study for Montevideo urged the city to develop "at a minimum," 24 to 32 units of one-, two-, and three-bedroom apartments as well as four to six townhomes of two- and three-bedroom sizes.

The Thunder Hawk project is being developed on the city's east side. The 42,970-square-foot complex will include a mix of one-, two-, and three-bedroom units. The apartment complex will include a three-stop elevator, community room, fitness center and laundry, and 10,500 square feet of garages, according to Corey Gerads, president and part owner of Alliance Building Corporation of Sauk Rapids.

The project represents a $5,411,317 investment by the company in the Montevideo community, according to Gerads.

The rental rates will range from $820 to $870 for various one-bedroom options to $920 to $1,200 for two-bedroom options and $1,320 for three-bedroom units.

The company is also looking to develop an additional 24 units on this site as a second phase of the project if the market supports it, according to Gerads.

The company has developed similar market-rate apartment complexes in a number of communities, including Sauk Centre, Avon, Glencoe and Gaylord. The Gaylord project is among the most recent, and just reached 97 percent occupancy, according to Gerads.

The city of Montevideo and Chippewa County approved tax abatements to assist the project. The site requires an estimated $285,000 worth of soil corrections to make the development possible.

Montevideo joins a growing list of communities in the five counties served by the Upper Minnesota Valley Regional Development Commission working to address housing needs. Housing emerged as one of the top priorities when the commission surveyed community leaders in Big Stone, Chippewa, Lac qui Parle, Swift and Yellow Medicine counties about their goals in the past year.

Dawson and Madison have housing projects underway, Granite Falls recently completed its own housing study, Benson is holding strategic planning discussions, and Appleton is removing blighted structures.

Rental housing is very tight, with 0 to 2 percent vacancy in the region. The southwest region of Minnesota overall has a higher proportion of aging single-family homes, with 57 percent of residences built prior to 1970, according to information from the Upper Minnesota Valley RDC.

Adding to the challenges, average household incomes in the five counties are below the state. Data from 2019 indicate an average household income of $55,404 in the region, as compared to the state average of $71,306. Lower living costs helps offset some of the disparity.

At the Montevideo groundbreaking, Gerads said it is always difficult to predict who will be among the new apartments' first tenants. The apartments are being built to accommodate everyone from single persons and young families to empty nesters and retirees. He said the mix of tenants at other newly opened facilities built by the company have varied.

It's a fair guess to say that many of the tenants are likely to plant roots in the community. Gerads said the company always surveys tenants who are leaving its apartments as to why they leave. A full 80 percent are moving to either buy or build their own home, he said.