Bowman’s Landing joins group of apartment seeking refinancing, Hettinger to hold promissory note

Lutheran Social Services of North Dakota is seeking cooperation from the city of Bowman to help refinance 10 of its low-income properties across the state.

Hettinger’s newest apartment building is a part of the group seeking refinancing options. (Record File Photo)
Hettinger’s newest apartment building is a part of the group seeking refinancing options.
(Record File Photo)

By BRYCE MARTIN | ND Group Editor
bmartin@countrymedia.net

Lutheran Social Services of North Dakota is seeking cooperation from the city of Bowman to help refinance 10 of its low-income properties across the state.

Steve Fenlon, a finance specialist with Midwest Healthcare Capital, requested Tuesday on behalf of Lutheran Social Services that the city join several other North Dakota cities to procure tax-exempt financing for The Landing and other properties.

Lutheran Social Services is considered a non-profit private corporation, but the only entity capable of assuming tax-exempt financing is city municipalities.

Fenlon has traveled the state in the past several weeks speaking to various city commissions on the topic. He told Bowman commissioners that six other cities will join Bowman to act as a conduit for financing. The city of Hettinger would hold the promissory note, but have no responsibility to pay on it.

Having one city hold the note, as Fenlon explained, greatly reduces the amount in legal fees associated with the financing.

The refinancing would avoid paying income taxes on the 10 properties in the state, reducing interest by nearly a third.

“Lutheran Social Services is a treasure to the state of North Dakota,” Fenlon said.

The Fargo-based organization establishes low-income housing, among other projects, around the state. It is only for “benevolent purposes,” he said.

Cities involved in the conduit financing would not take on any risk, according to Fenlon.

Finance Commissioner Darren Limesand made a motion to approve Fenlon’s request for the city’s involvement, with Commissioner Ryan Shear offering a second. The motion passed unanimously.

Fenlon told commissioners following the vote that the other cities involved, so far, had also unanimously approved the request.

Of the 24 total apartments within The Landing’s three-story structure, only 15 have been rented — nine of those are by ABLE employees. That number, according to Lutheran Social Services Director John Phillips, is considered low but the organization remains hopeful.

“(The Bowman County Development Corp.) identified a need in Bowman for housing,” Phillips said earlier this year. “When you build in a rural community that hasn’t had anything built for a long time, they don’t really understand what costs of construction is and the cost of rent.

“We’re trying to overcome that.”

While some felt an initial “sticker shock” from the rental costs of the market-rate apartments, Phillips said they have applied for a supplemental grant for the property that could lower its rental rates. But there are also income-based units still available.

“In the meantime, we’ll really work to get it occupied,” he said.

He said he feels the need is still here.

“How do we accommodate the school need, how do we accommodate the workforce needs,” he said. “It’s something we have to identify; it’s taken longer to rent up than we had anticipated.”







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