The $7 million Library Square II project received the blessing of the Mandan City Commission Tuesday. Construction is scheduled to begin in the spring, and the project is to be finished by the end of 2009.

Library Square II will be built on five lots at the corner of First Street and First Avenue and will mirror the original Library Square project at the other end of the block completed in 2001, according to CommunityWorks North Dakota executive director Paul Rechlin. Rechlin's nonprofit organization will co-develop the project with MetroPlains.

The four-story building, being built on the 35,000 square feet of city-owned property that is being sold to the developers for $1, will provide 45 affordable senior apartments along with 4,000 to 5,000 square feet of commercial space on the ground floor. The estimated value of the property is $5.50 a square foot, or $192,500 after demolition and remediation.

The project will mean the removal of the former federal building, which was given to the city in 1963 and used for a library until 2003, at which point the library was moved and the building left empty.

Along with the property, the city will provide the investors with Tax Increment Financing, which will return to them $57,366 annually or $860,492 over 15 years, based on the present property tax mill levy. The investors, expected to provide $5 million in private capital, will be eligible to receive federal income tax exemptions.

City Administrator Jim Neubauer called the project a long-term investment by the city. While the building will be exempt from property taxes for 15 years, at the end of a 30 year period, the city will realize more than $1 million in property tax from the project. The developers also will be paying property taxes on the land of about $5,000 a year. Currently, the city receives no tax revenue from the lots.

Rechlin called it unfortunate that e-mails and letters to the editor have misrepresented the project.

"Our mission is to strengthen communities and not take from them," Rechlin said. "We are not asking $6 million as is being charged. The value of the land and the Tax Increment Financing together, minus taxes on unimproved lands, is roughly $1 million. No check will be written to CommunityWorks, there is no payment out of pocket by the city. The only check written will be by CommunityWorks to the city for taxes on the unimproved property. In 30 years, more than $1 million will be paid back through property taxes to the city. So, a million dollars in non-out-of-pocket funds by the city leverages a $7 million project."

As far as assertions that the developers were out-of-state concerns, Rechlin said CommunityWorks North Dakota is entirely a state nonprofit organization with strong ties to Mandan. MetroPlains investors will have no ownership whatsoever in the building, Rechlin said, and only a limited partner.

The investors will receive the income tax credits, but once the Tax Increment Financing is completed in 15 years, the limited partners are out, said Rechlin.

"It's kind of a dream situation. You're getting investment from out of state, yet are retaining local ownership and management," Rechlin said.

It was further explained that Mandan is in need of affordable low-income housing for seniors. Library Square has a waiting list of 80 to 100 eligible seniors, and there is a need for more than 1,000 of these type of apartments in Mandan.

Mandan resident Susan Beehler was the only person to oppose the project. After her presentation, Commissioners Tim Helbling and Dan Ulmer accusedd her of misrepresenting the facts.

Beehler was also criticized for wasting city staff time and resources with unreasonable requests.

Beehler replied that the amount the city was providing didn't reflect the true amount the developer was receiving. She also said that a petition would be circulating in an attempt to save the former library.

Commissioners unanimously approved a series of motions that modified the city's Urban Renewal Plan, approved the lot purchase agreement, provided the tax increment financing and approved a business incentive agreement protecting the city if the developers do not meet the project goals.

(Reach reporter Gordon Weixel at 250-8255 or gordon.weixel@;bismarcktribun. com.)