Dugger Council fields questions over apartment project

Monday, March 5, 2012

The Dugger Town Council fielded numerous questions Monday night about a proposed 10-unit apartment complex which could be constructed with the state's share of $9 million in federal funds.

However, on some things, the new council members admit they're still at a loss for answers, asking for time to learn more about the proposal.

"What's the cost to maintain it a year?" resident Brock Heaton asked.

Estimates suggest the property could bring in $400 per month for 10 two-bedroom apartments, providing revenue of $48,000 per year.

However, that money won't come free and clear of expenses.

It's probable a maintenance man must be hired for upkeep on the property. While the new facility may not need major repairs for around a decade, some Dugger residents suggested the costs could be greater than town officials expect.

"It's a given that people who buy their property tend to take a lot better care of it than people who rent," said Gary Joe Mentillo. "At the outset, things like this may work out good, but as the years go by, it can become a total nightmare."

Other questions concerned council members, such as whether utilities will be included in the rental rates, and who will cover the cost of running sewer and water lines to the new apartments.

Questions also arose over who presently pays taxes on the 50 acres, donated to the town by Peabody Energy. That donation came with a caveat: The town must develop that land within five years or it reverts back.

"I think it's almost been three years," Lovelace said.

Some citizens called for changes to the proposal, from placing the project up for a referendum vote or modifying it to sell lots, rather than build an apartment complex.

"We might, at a future meeting, possibly look at rearranging it and selling it as plots of land," Lovelace suggested.

However, other town officials said costs of extending sewer and water to the site would prove prohibitive unless the apartment complex were developed first.

"I'm here to learn about it," said Council President Dwight Nielson. "Good Lord, we've only had one hour with them so far. That's all they give you. There's only so many questions you can get answered in an hour."

Nielson and other town officials travelled to Indianapolis Feb. 24 for a session with the Indiana Housing Finance Authority (IHFA).

Their goal was to revive the effort after a grant application for the project, slated to cost just over a million dollars.

The application was initially rejected for two reasons cited by the state, officials said.

The town failed to demonstrate a need for new housing in the area and adequate support in the community to pay the projected $400 monthly rent on each apartment, Nielson said.

"They weren't sure they had enough people to pay $400 a month in rent," said Nielson.

However, he noted the nearby coal mine employs around 600 people currently, and could eventually have close to a thousand workers.

"They're not going to move their family into a two-bedroom apartment," Heaton suggested. "They're going to buy their own houses."

Lovelace added rents of $500 to $600 aren't unreasonable in nearby communities like Sullivan and Linton.

It also, per IHFA, did not demonstrate that the land, which would be located southwest of Dugger, had adequate connectivity to infrastructure improvements.

"If it were located in town, it would have been built by now," Nielson said.

Former Town Council President Bill Pirtle, now a grant consultant for the town, said Dugger won't be required to put up a match for the grant money.

"We haven't lost the apartments," said Pirtle, who accompanied Pirtle, Nielson, Kinna Consultant's Angie Pappano and engineer Chris Jobe to the Feb. 24 IHFA meeting. "We have a good chance to get these built."

Numerous things could help the project, Pirtle said. First, the project isn't covered by prevailing wage guidelines which could increase the salaries of construction workers.

Additionally, both Kinna Consultants and Jobe Engineering have reduced their proposed contract costs. Those projections now total $1.085 million, a drop from the original proposal of $1.3 million.

In Wednesday's edition: The town considers a new attorney and the question of who that lawyer would represent, along with new mowing equipment and an offer for free help in the cemetery.

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