Worthington City Council Approves Financial Assistance for DeRocher Brothers Construction Project

The Worthington City Council has authorized a $180,000 payment to DeRocher Brothers Construction following the completion of the first phase of a 36-unit residential development. This financial incentive, structured at $15,000 per apartment unit, is designed to bolster local housing stock through a combination of municipal funds and state affordable housing aid. The successful leasing of the first 12-unit building underscores the critical demand for new multi-family construction within the regional market.

City Administrator Steve Robinson reported that a certificate of occupancy was issued on July 1 for the first 12-unit building at North Grand Avenue and Darling Drive, prompting the council to release the initial $180,000 in assistance. This payment is part of a larger agreement authorized in January that provides DeRocher Brothers Construction with up to $540,000 for the completion of three buildings. The first building is already fully leased, signaling strong market absorption for new residential units in Worthington.

Funding for the project is sourced primarily from the Minnesota Statewide Affordable Housing Aid program, which has provided $131,082 to the city thus far, with another $20,943 expected later this year. Additional capital is available through the city’s Spending Plan, which currently maintains a balance of $1,073,991. Robinson emphasized that these funds must be committed by the end of the year to avoid being transferred back to Tax Increment Financing District No. 7: Darlings Third Addition.

The remaining two buildings in the development are currently under construction and are nearing completion. Robinson informed the council that he anticipates occupancy certification for the entire 36-unit project within the next two to three months, well ahead of the year-end funding commitment deadline. This project represents a significant portion of the city's current housing development activity, as Robinson noted there are no other major anticipated requests for these specific housing funds at this time.

In addition to the residential project, the council approved a $50,000 disbursement to Thomas JJ Developments to assist with interior improvements for a commercial project at 1710 Humiston Ave. This broader investment strategy highlights the city's use of financial incentives to drive both residential and commercial construction. Council members, including Mike Kuhle and Chris Kielblock, sought to ensure that the occupancy and funding timelines align with the city's fiscal requirements for the current year.