A project to build housing for low and moderate income people in downtown Jamestown is in the early stages of planning, according to Jamestown Mayor Dwaine Heinrich.

The preliminary plan calls for the demolition of the former Eagles Club building and the construction of a four-story apartment building with 33 units, he said. The estimated cost of the project is $4.8 million, according to application documents filed with the city of Jamestown.

"A proposal is coming forward," Heinrich said. "Where it ends up I don't know."

Erin Anderson, vice president for development of the Commonwealth Companies, the project's developer, said it is still in the preliminary stages. Commonwealth is in the process of applying for the Low Income Housing Tax Credit, a federal tax incentive for low-income housing developers administered by the North Dakota Housing Finance Agency, and a payment in lieu of taxes for property taxes through the city of Jamestown.

Property with a payment in lieu of taxes agreement pays a negotiated tax amount rather than the taxes that would be calculated based on the property's value and mill rate, according to Jamison Veil, Jamestown city assessor.

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Veil said Commonwealth has proposed an annual payment of $35,000 for 15 years. At the end of that term, the building would be taxed at the full rate.

"The full tax burden would be about $79,000 (per year) based on last year's mill rate and a value of $4.8 million," he said.

Heinrich said even based on the $35,000 payment, it would be the biggest taxpayer on the block.

Anderson said the property would include one, two and three bedroom units. The ground level would include a covered parking area with a lobby and possibly office space with apartments on the floors above. Rent in the building would be below the market rate for similar housing in Jamestown but not on a sliding scale based on income.

The building is meant for people with an annual income somewhere between 30% and 80% of the Stutsman County median income which was $56,000 in 2017, she said.

David Klein, executive director of the Great Plains Housing Authority, said there is a need for this type of housing in Jamestown, especially for victims of domestic violence or people facing other challenges.

"We have issues finding places to house families," he said. "Older homes and apartments do not meet the needs."

It is also a good fit within the community, giving a boost to downtown by replacing a vacant building with a new structure, Klein said.

"A development in downtown Jamestown would be fantastic," Klein said. "The location offers access to places to work and is in walking distance of schools."

Discussion of the payment in lieu of taxes is tentatively on the Sept. 24 Jamestown Finance and Legal Committee agenda, Anderson said. Decisions regarding the Low Income Housing Tax Credit could come in November. If both are approved, the project could move into construction in the spring of 2020.

"It is not a certainty but a proposal," Heinrich said. "We're interested in knowing everyone's opinions."