Special assessments nearly double for West Lake Drive Phase Two property owners; hearing set for June 7
Due to the rising cost of the West Lake Drive Phase Two street and utility project, between County Road 6 and the Pelican River, and significantly higher than estimated assessments to property owners, a second special assessment public hearing has been scheduled for the project on June 7 at 5 p.m. at City Hall in Detroit Lakes.
DETROIT LAKES — A second public assessment hearing has been scheduled for property owners along the West Lake Drive Phase Two road and utility project between County Road 6 and the Pelican River.
The new public hearing, to be held June 7 at 5 p.m. at city hall, is the result of higher than estimated project costs and, correspondingly, significantly higher special assessments to the property owners from what they were initially told in fall 2021.
"What I can tell you is that larger lots are looking at increases right now of around 50%, if you are one of the larger properties," said Jon Pratt, city engineer for Detroit Lakes.
Pratt said the city itself is taking on the lion's share of additional project cost, nearly doubling its portion of preliminary cost estimates, from $714,800 to $1,414,403. The city planned to cover 26% of the project initially, but that has increased to 34% after the new costs were factored in.
Becker County's share of the project actually decreased from 48% to 37% of the total.
In October 2021, the property owners along West Lake Drive Phase Two were told they would be assessed for 26% of the total project, but that percentage has risen to 29% after the new costs were factored in. Initially, the residents were going to be assessed collectively for $731,700; now, their total assessable share is $1,194,065.
"There are a lot of lots that are in that 40-foot to 50-foot range, and they are looking are increases on the magnitude of right around 100%," said Pratt. "It's a lot, but I think it's important for people to understand that only 30% of the project is getting passed on."
At the October 2021 public hearing, property owners were told that, on average, a 50-foot lot would be assessed $14,258. That average, Pratt said, with current project costs, is now about $24,300, a 70% increase. For owners with a 100-foot lot, they were told their assessments would be about $22,690; now, those assessments have risen to about $37,000, a 63% increase.
The two largest properties along the West Lake Drive Phase Two project are Breezy Shores Resort and Voyageur Lanes bowling alley. According to Pratt, the assessments for the resort are increasing 64%, to $271,387, and the bowling alley's assessment cost will increase 47%, to $232,625.
With these increases, Pratt said, the city needed to bring the property owners back into the process before awarding the project bid, adding that he sees three different options for potential outcomes at the June 7 public hearing with the property owners.
- First option: The property owners accept the new assessments and the city awards the bid for the project, as is. Construction could still begin this year.
- Second option: The city postpones awarding the project bid and re-bids the project at a later date, which may include higher, or lower, prices for items and materials. Construction on West Lake Drive Phase Two would be postponed.
- Third option: The city agrees to use additional funding to help alleviate the increased assessment costs for the property owners, for this individual project or as part of a broader special assessment policy revision affecting all Detroit Lakes residents, and awards the project. Construction could still begin this year.
" What people tend to not totally grasp is...the city is everybody, that's all of the property owners," said Pratt. "And (additional funding) has to come out of somewhere else, and now everybody in the city is contributing."
Pratt said he believes special assessments are necessary because property owners along the improved route would have "skin in the game" for any improvement project in their neighborhoods, which alleviates cost for the rest of the city's taxpayers.
Pratt said this project initially started about 10 years ago as a request from the property owners for sewer improvements, since the low-lying area is frequented by sewer backups. While the scope of the project has grown, he added, the end result is the city responding to a request from the property owners.
"It's been about 10 years, it's been on and off, it hasn't been a constant, we'd pick it up, nope, never mind, it's too expensive, a few years later, pick it up again," he said.
Jamie Lewis, resort manager for Breezy Shores Resort, said she plans on attending the June 7 public hearing and thinks these assessment increases may end up getting passed on to their timeshare owners.
"We'll probably have to do a special assessment to all the owners," said Lewis. "(Owners) get a maintenance fee every year for the timeshare, and we have things go up in price, and of course when costs go up, we have to bring up their prices, and when you start having these big assessments and whatnot, you end up losing some owners."
During the most recent city council meeting on May 10, Pratt said that if the city doesn't award the project bid at the special meeting June 7 or the regular city council meeting the following week, it would be difficult to complete the project this year.