A developer’s plan to build 95 low-income housing units to replace the shuttered Red Pine Estates apartment building in Bemidji is getting mixed reaction from city leaders, who are weighing the city’s need for more housing with a desire to make sure that history doesn’t repeat itself at the site.
Golden Valley-based Schuett Cos. wants to create 59 homes for seniors and 36 units for families on the Red Pine site at 2590 Ridgeway Ave. The plan is to tear down the dilapidated existing building and replace it with two new structures. A second project phase could bring another 75 to 100 units to the 6-acre site.
A city staff report reveals that the Schuett Cos. is applying for a grant from the Minnesota Housing Finance Agency to help finance the new buildings. Tom Schuett, president and CEO of Schuett Cos., said at Monday’s City Council meeting that construction could begin in May or June 2025 if the financing comes through.
Monday night, the City Council unanimously approved a generic resolution in support of tax-increment financing for the project.
Despite the unanimous vote, support for the resolution was tempered by concerns about the history of Red Pine, which is owned by the same company that now wants to redevelop the property. Schuett didn’t build the building, which opened in 1979, but bought it in the 1980s.
Last year, city inspectors shut down the 50-unit Red Pine building because of structural problems. After the “order-to-vacate” was issued, Schuett Cos. committed to rebuilding new homes on the site for “individuals and families with vouchers,” according to a city staff report.
The closure forced the relocation of more than 50 residents, including elderly people, and sparked a larger debate about oversight of the city’s aging rental housing stock, the need for quality affordable housing, and other big-picture housing issues.
As for Red Pine Estates, Schuett said he “acted honorably,” worked closely with displaced residents, listened to their concerns and offered new housing options for everyone. The developer also said he is committed to Bemidji and has worked in the community since the 1980s.
But one elected official shared a personal story about the building’s poor condition.
Council Member Josh Peterson said Monday that his grandmother lived in Red Pine Estates for a decade. During that time, he said, the ceiling in her first-floor apartment flooded twice, and people sitting in the living room could “literally see the floor move when people were walking upstairs.”
“If we were to grant you this TIF,” he asked the developer, “what reassurances can you give me and the community to know that this building will be inspected and maintained to standards so that nothing like this ever happens again?”
Schuett said Peterson’s concerns weren’t previously brought to his attention, but added that the building was inspected on a regular basis and that Red Pine never failed any inspections prior to the closure.
As for new construction, inspections are required by HUD, the Minnesota Housing Finance Agency, lenders and others, he said. The building would be slab-on-grade stick construction, he said, adding that Minnesota Housing has standards for construction quality.
A common theme in the meeting was the city’s desire for more housing, especially the affordable variety.
Schuett cited a report that says the city needs more than 1,000 units additional units for low-income people. One of the city’s challenges is a shortage of land with access to municipal services for housing development, according to Bemidji’s comprehensive plan .
Given the needs, it would be “ludicrous” not to support the TIF resolution, Council Member Audrey Thayer said.
The resolution approved by the council “supports the use of tax increment financing” of up to $314,000 over 26 years, but it doesn’t guarantee assistance or specify if it would be lump sum or pay-as-you-go. Any TIF assistance would be subject to a public hearing, verification of need and other conditions.
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