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Last week, the council approved an operation and management deficit agreement, committing the city to paying for the bonds for the $480,000 project if rents do not cover the costs.

The EDAP board had unanimously approved proceeding with the townhomes, which will be built in the WilGlo Acres Addition, said city administrator Steve Helget. This was the last approval needed from the city council for the project.

The operation and maintenance deficit agreement obliges the city to cover the bond payments in the event that rent for the townhomes proves insufficient.

Joe Egge - a former economic development director for Meeker County, representing F & L Management and Development, the firm that will actually be building and operating the townhomes - said that he had built over 120 units with F & L while in government employment and the operation and maintenance deficit agreement had never been needed.

Council member Tom Lindquist, who voted against the agreement, passed blank checks to the other council members at the start of the debate and asked them to sign. "The point I'm trying to make," he then explained, "is not a single one of you would sign a blank check. That's what we're doing here."

Council member Jeff Bertram, on the other hand, acknowledged Lindquist's concerns, recognizing that the project did entail risk. He also acknowledged opposition to the project from local rental property owners (whose concerns included flooding the rental market and having to compete with government). But he noted that this type of property - upscale, larger rental units with garages - still is not available in Paynesville.

"I'm convinced there is a need for this type of housing as a rental property," he said. He also reiterated EDAP's intent to sell these townhomes to private industry. Hopefully, if the project is successful, others will pursue upscale rental projects in the community, Bertram added.

The project originally was proposed as building four four-plexes, 16 total units, but EDAP scaled back the project, after concerns from rental property owners over flooding the local market, to a single four-plex at a cost of $480,000. The four-plex will include a three-bedroom, double-garage unit; a two-bedroom, double-garage unit; and two two-bedroom, single-garage units. Proposed rents are $925 for the three-bedroom unit; $875 for the two-bedroom, double-garage unit; and $755 for the two-bedroom, single-garage units.

While EDAP was specifically interested in this project as transition housing - for young professionals moving to town, for instance, or for people moving to town and wanting to build a house the next spring - these units are popular with seniors, said Egge, which then frees other housing in the community.

EDAP will not work with F & L to design plans and specifications for the project, said Helget. Bids could be let this fall with construction possibly starting yet this fall or next spring.