File photo
The city-owned West Lake Street property is being sought after for a residential development by a local businessman.

By Barbie Porter


The Vergas Economic Development Authority  discussed the potential sale of the City owned West Lake Street property the city owns.

During its monthly meeting on Wednesday, Oct. 6 the group was notified the city council had been approached by an adjoining landowner to the West Lake Street city property.

The city became owners of the 16-acre parcel when the land was tax-forfeited after the owner died. The city was given the opportunity to purchase the property, which has about 10 usable acres, in September of 2016. The city purchased the property for about $33,300. Since the city purchased it, the area has been used for storage.  

During the September city council meeting, business owner Josh Hanson said he purchased the land adjacent to the city parcel and intended to create a residential development on his 37-acre site. He expressed interest in purchasing the city parcel and adding that to the planned development.

The city budget committee put in a request for the EDA to consider a trade-off. If the council were to sell the land, the amount the city spent on the purchase would be returned to city coffers and the remaining profit would go to the EDA. However, the annual allotment of $8,000 would be removed for the upcoming fiscal year.

The property has a 2022 tax value of $62,500. While the EDA members stated the tax amount may not reflect the true value,  if it sold for the tax value, the EDA could stand to gain about $30,000. 

However, there is a chance the sale may not happen, so taking the allotted EDA amount from the budget gave pause to some members. It was suggested the $8,000 remain, and if the property sale goes through, then the allotted amount could be taken off the top of the sale amount instead.

There was also discussion of trading a portion of the land for land closer to the city shop. 

Grocer chats with EDA

The EDA also met with DuWayne Ditterich, who will operate the grocery store going into the new commercial space on Main Street. He asked the EDA if they were aware of any grant funds, and is also sought letters of support from city entities and residents. He said the grocery store grants he found have more success with such letters submitted alongside an application.

Ditterich said his store will provide the community with fresh fruits, vegetables, condiments and other staple cooking items, as well as fresh baked bread products.

“I will not be doing butchering,” he said. 

Residential tax 

abatement grows 

with county

The EDA was informed Otter Tail County saw such success with its tax abatement house build program that it extended it to 2024 and increased the amount allotted to $15,000 tax abatement. The program was offered to residential new builds, as long as the property was homesteaded. The EDA added to the county offering by providing  a $5,000  tax abatement on city taxes (or for 5 years, which ever came first).

Now, the question was, does the EDA want to extend the program, as well as increase the amount of tax abatement? Lammers reported there were two city homes that utilized the program, and she believed the structures would’ve been built regardless of the tax abatement program.

The EDA agreed to continue offering the tax abatement program until 2024, to coincide with the county. However, they agreed to keep the abatement amount offered capped at $5,000.