by Joni Astrup
Concerned that condos at The Bluffs of Elk River could turn into long-term rentals, city officials are exploring their options.
The Elk River City Council and the Elk River Housing and Redevelopment Authority (HRA) have asked the city attorney to determine the city’s options for keeping the condos owner-occupied. The Bluffs is located along the Mississippi River in downtown Elk River.
Three of the 67 condos have been sold. The other 64 are owned by Minnwest Bank.
Twenty-two of the units are available to be rented, according to Richard Schroeder, Minnwest senior vice president and credit officer. Nine are occupied and there are prospective tenants for six other units. The leases are for one year. The condos are still available for sale.
“We’re trying to cover some of our costs to pay the maintenance expenses and real estate taxes on the property through renting some of the units out,” Schroeder said.
He said the bank’s intent is still to sell what it owns.
Meanwhile, Paul Motin, a member of the City Council and the HRA, said The Bluffs condos were always intended to be owner-occupied.
At the March 7 HRA meeting, Motin said he’d like to see what the city’s options are with regard to that.
HRA Commissioner Larry Toth said he understands Motin’s concern and agrees to a point, but he wondered if it’s better to have the condos occupied than empty.
Motin indicated that short-term rental is one thing, but he is concerned if The Bluffs condos become long-term rental units they will never become owner occupied.
“I’d at least like to find out what action we could take,” Motin said.
Both the HRA and the City Council agreed to have the city attorney look into it.
Minnwest Bank’s Schroeder told the Star News he understands the city’s position.
He said he’s very respectful of the fact that everyone involved had a vision of all the condominiums being sold and occupied by the owners.
“Back in 2005 when the loan was closed, that’s what everybody’s goal was and times have changed,” Schroeder said. “None of us can turn back the clock. We as the current owner, as the bank, are not trying to determine the future use of the building. By renting the units we are simply trying to recover some of our costs to pay real estate taxes and other expenses.”
When the bank finds a buyer for the 64 condo units, Schroeder said the next owner might have some other idea.
“They might decide to sell them as individual condominiums. They might decide to pursue conversion to apartments. They might decide to convert it to senior housing. Those seem to be the most logical options for a building of this nature. But that’s not our decision to make. That’s a decision for the next owner,” he said.
The city has an agreement with Metro Plains, but not Minnwest Bank, that defines the “Bluff Block Housing” as “owner-occupied housing,” according to Cathy Mehelich, Elk River’s director of economic development.
The Bluffs was developed by Metro Plains.