The Beatrice City Council considered fronting $250,000 to invest in workforce housing on Monday night.
With an application date of March 30 looming, the council discussed the pros and cons of putting up some of the town’s LB840 funds to apply for grants that could quadruple that amount, which would be used for a revolving loan fund.
City Administrator Tobias Tempelmeyer discussed LB518, which passed the Nebraska Legislature in 2017 and put aside $7 million in cash for rural workforce housing. The city can apply for up to $1 million worth of grant funds, he said, and cities that put in funds can see that money matched by the Nebraska Investment Finance Authority as well as the Nebraska Department of Economic Development.
“So, if the city put in $250,000, NIFA would match $250,000,” Tempelmeyer said. “You now have half a million dollars, which you apply to DED for a half million dollars, you'd walk away with a $1 million revolving loan fund from your initial $250,000 investment.”
The funds would have to be used for workforce housing, Tempelmeyer said, which is defined as a single family residence up to $275,000 or multiple family living units that can cost up to $200,000 per living unit. The funds can be used for things like building new homes, renovating existing homes, creating upper floor living spaces in a downtown area and for infrastructure, he said.
The city would have to run the revolving loan fund through a non-profit development organization like the Southeast Nebraska Development District, he said, as the city does not have NDO status.
“The concern is that this is short timing,” Mayor Stan Wirth said. “But it's a tremendous return on our investment if we want to set up a revolving loan fund.”
Councilman Ted Fairbanks said he wondered if the city wouldn’t be better off going it alone, rather than going in with several communities through SENDD.
Since everyone has a vote, Fairbanks asked NGage Executive Director Walker Zulkoski if the dollars end up some place else instead of Beatrice.
“I'm conflicted because it's a group and you don't know what the agreement is between the other communities,” Fairbanks said. “You're still competing, so how do you make me feel better about that, Walker, so I'm going to vote for this, because at this point, I'm not.”
While some of the money could be spent in other places, Zulkoski said, he still thinks Beatrice will have more opportunities.
The point is to make the fund grow, he said. It’s not a grant program, Zulkoski said. It’s all cash that’s lent out and comes back to the pool.
“You're talking about economic development,” Zulkoski said. “We're the cowboys that are always going out and trying to get these crazy things, but this is a great opportunity. Maybe that's where we come at it from two different points, I see just a ton of opportunity here.”
The first step, Tempelmeyer said, is to set up the rules with the other communities. It’s like starting a business, he said, and it needs structure.
Wirth said that there are a lot of communities after the dollars, and once the money allocated by LB518 is gone, it’s gone.
Councilman Phil Cook said that while it might be scary to be going into an investment pool with several communities, there’s encouragement to work together.
“To me, if we're going to do this, we're all going to be in the same boat and we've got to play together,” Cook said. “We're going to be on the same team, I don't see why one would try to slit the throat of the other one.”
The pool would be a consortium of four or five different communities, Wirth said, and each community would have a vote. He said he thought it would be more project-driven rather than based on the size of the community.
Zulkoski said there’s a push in Nebraska, as well as around the country, to think more regionally. This, he said, would be a chance for Beatrice to become a regional partner.
At NGage, he said he’s seen manufacturers and other companies around the community, and many employees travel into town from quite a distance. So, even if housing was to be built in a place like Auburn or Geneva, people could be commuting from there to Beatrice.
“If we get it, that's great, but if not, it still helps everyone,” Zulkoski said. “It's just kind of a rising tide raises all ships.”
The city will have about $600,000 in the LB840 fund—which is collected and appropriated from local tax dollars for economic development purposes—by the end of the year, Wirth said.
The council will meet on March 19 to vote on whether to approve.