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Sturgis developing affordable housing

October 7, 2018

STURGIS — The surplus sale of the Sturgis Public Works administration building brought about deeper discussion at Monday’s City Council meeting on the city’s involvement in developing homes in the Woodland Drive area.

Initially, city staff had looked at moving the existing Public Works administration building to the West Woodland Drive property where the city is currently developing four residential lots with Governor’s homes on them to be sold.

After reviewing cost estimates for development of the lots, placement of a foundation, expenses of moving the building and remodeling the building to meet residential occupancy codes, it was decided that it would be in the best interest of the city to sell the building, said Sturgis Public Works Director Rick Bush.

Moving the building would cost about $10,000. Cost of a basement foundation to put the structure on would have cost about $40,000 and the remodeling would be costly also, Bush said.

He said staff also believed that placement of the administration building next to the Governor’s houses, that are intended to be sold to homeowners, may not be aesthetically pleasing.

“We concluded that after all expenses were incurred in moving the building and remodeling it, we would most likely not exceed $20,000 profit,” Bush told the council.

The city staff recommended, and the council approved selling the building to Shanon Vasknetz for $25,160 who plans to move it to land he owns on Junction Avenue between Saber’s Insurance and McGas.

“It’s a win/win for everybody,” Bush said. “And, it will make our subdivision that we are doing over there a little bit tidier.”

With the sale of the building, the city now has funds to buy a fourth Governor’s house to place on the property development going up on Woodland Drive, Bush said.

City Council member Mike Bachand wanted to know when the city entered the home building business.

“Are we authorized to do that? To be in direct competition?” he asked.

Sturgis City Manager Daniel Ainslie said the homes were filling the need in the community for affordable housing.

“Frankly, they are not in competition with anything being built in the city,” he said. “It is quite common to do housing projects like this. Cities will do that.”

Ainslie said the Governor’s houses are much different than residential homes that are being built at other subdivisions around Sturgis.

“Honestly, developers do not want to come close to touching these types of projects because the profit margin isn’t that high,” Ainslie said.

Ainslie said the city will go out for bids seeking someone to build the homes on city land to the north of Woodland Drive. That developer would place Governor’s houses on the lots, add garages and landscape the property.

In 1996, the Governor’s House program was created in South Dakota as a way to provide reasonably sized, affordable homes to income-qualified individuals and families.

Sturgis currently has some Governor’s houses on Moose Drive near the Aspen Grove Assisted Living Center.

The homes will be 1,200 square feet with three bedrooms, two-car garages and will cost about $140,000, Ainslie said.

“We are doing it to provide some moderate-income housing, so that first-time homebuyers can establish roots in Sturgis,” Ainslie said following the meeting.

The homes should be available for sale by next summer, Ainslie said.

“We think they will go quite fast,” he said.

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