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Eagan adopts ordinance establishing Widgeon Woods Housing Improvement Area; fees, financing spelled out
Summary
The council adopted an ordinance and resolution to establish the Townhomes of Widgeon Woods Housing Improvement Area (HIA) and to impose a housing-improvement fee; the 33-unit association may prepay costs to avoid bond interest and will face a 45-day veto period under state law.
The Eagan City Council on March 4 closed the public hearing and adopted an ordinance establishing the Townhomes of Widgeon Woods Housing Improvement Area and a companion resolution imposing a housing-improvement fee on units within the area.
Community Development Director Hutmacher explained that housing improvement areas (HIAs) are a financing mechanism governed by Minnesota statute that allow townhome and condominium associations to use an owner-imposed special taxing district to fund common-area work when private lenders are unwilling or unable to provide permanent financing. The Townhomes of Widgeon Woods is a 33-unit development on Widgeon Way; the association applied for HIA assistance for siding, deck, porch and railing replacement.
Hutmacher told the council the city had previously approved an HIA ordinance and resolution for Widgeon Woods on Dec. 17, 2024, and that four objections were received during the 45-day objection period. The objections did not meet the 45% veto threshold under state statute, but the homeowners association requested a restructuring of the financing to allow homeowners to prepay their proportional share prior to bonding to avoid interest; that revision requires restarting the ordinance and the 45-day objection period.
The association identified construction-related soft costs of $2,435,000. The total estimated cost of financing the project, including construction and related soft costs, bond issuance, capitalized interest, professional services and city administrative costs, is $2,560,000. The proposed annual housing-improvement fee per unit is estimated to be not less than $6,882 and not to exceed $7,452, based on debt-service scenarios and potential rate changes. Homeowners wishing to prepay to avoid bond interest may pay $82,500 per unit if payment is made by Aug. 25, 2025, staff said.
Hutmacher and staff noted that the association submitted petitions of support from approximately 75% of owners (the city’s HIA policy requires at least 65%); because the HOA requested the financing restructure, the council approved a new ordinance and the council-authorized publication of a summary ordinance following the restart of the veto period. Finance Director Josh Spellman and HIA consultant Doug Strandis were available for questions; Jane Tunseth, president of Townhomes of Widgeon Woods, spoke in support and thanked city staff for help reworking the financing.
A council member moved to close the hearing, adopt the ordinance establishing the HIA, adopt a resolution imposing the housing-improvement fee on units within the HIA, and authorize publication of a summary ordinance; the motion was seconded and carried.
