The Village of Gays Mills discussed and then passed a policy, which addresses the declining values of single-family residences recently built in the flood recovery effort.
The Wisconsin Department of Administration had urged the village to craft a resolution that would protect the low and moderate-income homeowners, when and if, the properties are sold. The single family residences financed by federal Community Development Block Grants, administered by the state, cost between $130,000 and $160,000 to build. Recent market value appraisals have them closer to $100,000 in value.
State officials, like the DOA’s Stan Kaitfors who oversees the situation, became concerned in the past year when they realized the properties are valued for tax purposes at significantly less than the cost of their construction just two to five years ago. In some cases, the 12 houses are valued at 25 to 33 percent less than what they cost to construct.
Some of the low and moderate-income homeowners have equity in the homes based on money they were given for buyouts of the former residences in the floodplain, as well as relocation funds. They have zero interest loans that are due to be repaid when the properties are sold.
However, with the drop in real value there may not be enough money to pay off mortgages and equity. The village policy addresses how the properties must be listed and sold to avoid situations that would allow the homeowners to sell to friends or family at reduced costs without properly offering the residences with a qualified listing on the market for at least six months. The policy does not appear to address the question of equity versus mortgage payment at the time of sale, if the property is undervalued.
When village trustee Albert Zegiel made a motion to approve the policy drafted by the Housing Assistance Committee and presented by Community Development Alternative’s Lori Bekkum over a minute went by before Steve Wetter seconded the motion. It passed by a narrow margin on a voice vote with trustee Aaron Fortney abstaining. Fortney’s parents, former floodplain residents, own one of the houses built in the relocation area.
Earlier in the meeting, the board heard an upbeat report from Kickapoo Culinary Center Director Brad Niemcek. The director of the village-owned, shared-use kitchen located in the Gays Mills Community Commerce Center told the board that kitchen rental was up 72 percent in the first nine months of 2015 compared to the same time period in 2014. He also noted total revenue increased by 22 percent and expenses had also increased by a little less than that.
The kitchen’s largest client was the American Hazelnut Company, which rents the facility to process its nuts. Niemcek, hazelnut grower, explained in some detail the process involved and the marketing progress being made by the group.
Niemcek began his report with some bad news. He told the board that room rentals in the Community Commerce Center were down 58 percent. He noted there were a lot of meetings exempt from charges because of the nature of the organization or the meeting.
Niemcek said the Gays Mills Economic Development Association (GMEDA) was ready to sign another memo of understanding with the village to provide management of the kitchen with Niemcek serving as the Kickapoo Culinary Center Director.
At one point, Niemcek joked that his annual salary of one dollar had not been paid since he began working in the position. He also said the time was approaching when it might be necessary to begin looking for his successor.
Niemcek said GMEDA would again present the village with a check for $1,500 for maintenance costs of the Gays Mills Community Commerce Center. He also explained that an escrow account to help pay for equipment replacement was not being funded at this point. However, he went on to explain since most of the equipment was purchased new, it would seem to have a long useful life ahead of it.
Zegiel said the kitchen under Niemcek’s direction had made “stellar progress.”
The board approved renewing the contract with GMEDA to manage the kitchen.
Village trustee John Johnson asked if the contract would be signed. Village president Harry Heisz noted that while the contract was not signed in the past, getting it signed would not be a problem.
In other business, the Gays Mills Village Board:
• heard an update from Jim Chellevold, the village’s director of public works, on progess being made on the build out of sewer and electrical services at the Gays Mills Mercantile Center for a new tenant, Transportation Insurance Professionals
• heard from village president Harry Hesiz that the new Mercantile Center tenant had signed a five-year lease
• approved accepting property from the county, which had received it for back taxes, located in a swampy area off Grove Street to insure drainage in the area
• were told by Brad Niemcek that there was no report on the recreational trail being planned for the village
• tabled a Crawford County Historical Society request that the village declare its ownership of the Log Cabin Village so that the group could cease paying insurance costs on the property
• approved making a request of the Wisconsin Department of Transportation to release part of a large right-of-way on the north side of Highway 131 from Del La Mater Road to the end of the industrial park
• repealed and recreated Schedule A of Title 9 Chapter 2 Relating to Sewer Rates allowing for a monthly increase of $1.50 to the flat rate for sewer customers
• approved making a request of the WDOT to approve ATV/UTV Routes on Highway 131 to gain access to the Marketplace for gas and grocery store access