Affordable housing taking shape in Colman

Spec homes under construction in Sunrise Ridge Estates

Low cost-of-living, ideal location, plus a sense of kinship and small-town appeal are just some of what makes Colman, South Dakota a great place to live.

There’s just one problem: a low inventory of homes for sale.

But an area developer hopes to change that.

Josh Spilde recently purchased ten lots in the community’s housing development, Sunrise Ridge Estates, with plans to build affordable homes perfect for families and first-time home buyers.

Proven track record

Spilde is the owner and operator of Spilde Electric in Arlington, SD, a business he’s run since 2003. He first ventured into housing development in 2015 in Aurora, SD.

After identifying a need for affordable housing opportunities in and around Brookings, SD, Spilde purchased fourteen acres in nearby Aurora and installed infrastructure.

Soon, the raw farm land had transformed into a 24-lot housing development complete with water, sewer and electrical services as well as roads. By March of 2017, half of the lots had sold, some with homes on them, and work had begun on an additional 18 lots.

Spilde’s development included 1,900 square-foot spec homes with price tags under $200,000. The new, move-in-ready homes were affordable, convenient, appealing options that led to a booming development.

Signs point to success

Spilde’s lots in Aurora have since sold out and officials from roughly half a dozen communities have contacted him about managing similar projects within their city limits.

The Colman Economic Development Corporation (CEDC) was among those inquiring. Spilde was familiar with the community and soon discovered it offered favorable conditions.

Sunrise Ridge Estates in Colman offers lots ready for development.

Colman is roughly the same size as Aurora and is also centrally located near major thoroughfares and larger cities.

CEDC already had shovel-ready lots available, located only blocks from the school, swimming pool, golf course and city park.

“It’s a great location and the initial legwork is already complete,” Spilde said. “Also, the development corporation is supportive and eager to work.”

Filling a need

Spilde signed a purchase agreement for ten lots in the development with plans to build spec homes on each lot. He broke ground on the first two in early March.

Both homes under construction feature open-concept floor plans with two bedrooms and a double garage. They each come equipped with cabinets, a kitchen island and a deck off the dining room. Unfinished basements will offer room to grow.

Although construction is underway, potential buyers still have time to pick out some finishes and options. They can also work with Spilde on custom features of future models.

Basements have been poured in Spilde’s first two spec homes .

According to Lori Hansen of Signature Realty Group, LLC. and a member of the CEDC board, response to the project has been positive.

In fact, one home sold before Spilde broke ground. The other is currently listed at $209,900.

“It’s peaked many buyers’ interest,” Hansen said. “This is very special to me as I have lived in Colman for over 40 years and I love this community. We are poised to grow but we need more housing opportunities. This project helps make it possible.”

Heartland is common denominator

Heartland Director of Economic Development and Governmental Affairs Casey Crabtree is anxious to see how the project plays out.

As wholesale power provider to both communities, Heartland has been a common thread woven into each city’s housing development project.

Heartland helped Colman get Sunrise Ridge Estates off the ground in 2009 by developing a graduated incentive program for three governor’s homes. The three homes were purchased by West River Foundation, a regional non-profit economic development corporation. The CEDC applied for a grant from Heartland to assist buyers with closing costs.

Then-Manager of Economic Development Russell Olson also helped coordinate marketing efforts for the development, helping the city conduct a housing fair and produce advertising material, including a billboard along Highway 34.

Spilde utilized low-interest financing from the Heartland Economic development Loan Program (HELP) Fund in both 2016 and 2019 to move forward with his development plans in Aurora.

“We have partnered with Josh a few times and it’s incredible what he was able to accomplish in Aurora,” Crabtree said. “Colman has been seeking a similar outcome for their development and we thought Josh would be an excellent fit. We expect great things to result from this partnership.”

Offering a solution

Spilde hopes to complete the first two homes in July and start another in the fall. Models of future homes will vary but all will be priced competitively.

“I think housing should be affordable and maintenance-free, especially when you’re a first-time buyer or a young family,” he said. “Lack of options presents a real problem. I’m looking forward to being a part of the solution.”

A buyer has committed to one of Spilde’s spec homes. The other continues to draw interest.

LED projects receive funding assistance

Grant recipients will see significant annual savings after upgrades

Four Heartland customers will have more efficient lighting in 2018 with help from Heartland’s Power Forward program. The cities of Madison, Arlington, and Aurora, SD as well as Truman Public Utilities in Minnesota recently received energy efficiency grants to assist with street and public facility lighting upgrades.

Heartland offers grants to customer utilities to perform energy efficiency improvements at city facilities. Eligible projects include those that optimize electric energy use, such as installing energy efficient lighting.

“Upgrading to more efficient lighting can provide significant savings to a municipality,” said Heartland Communications Manager Ann Hyland. “The more efficient use of electricity frees up funds for other important city projects.”

Heartland awards a limited number of grants to customer utilities each year with funding distributed on a first come, first served basis.

“Heartland is happy to help our customers with these important projects,” said Hyland. “Our requirements are pretty simple – the city or utility must provide a cost share and we must be able to verify the project will provide savings. We do have limited funds available for grants so we suggest customers thinking about implementing energy efficiency improvements this year apply sooner rather than later.”

Madison, SD

The city of Madison earned a $2,500 energy efficiency grant to switch incandescent lights to LEDs in concession stands and bathrooms at area parks. The city is also installing motion sensors to ensure lights are not left on when the buildings are not in use. The upgrade will save the city approximately $770 or 6,115 kilowatt hours annually.

 

Arlington, SD

Arlington is continuing to upgrade street lights throughout the city. In 2018, the city will replace 22 high pressure sodium street lights with 63-watt LED lights. With an average annual energy savings of over 24,000 kWh and annual dollar savings of over $2,400, the new lighting will pay for itself in savings in just over four years.

 

Truman, MN

Truman Public Utilities is also moving forward with another phase of street lighting upgrades. The city is replacing 65 street lights in 2018, switching from 250 and 150 watt HPS bulbs to 74 and 138 watt LEDs. The city will see an average annual energy savings of over 34,000 kWh, or $3,400 annually.

 

Aurora, SD

The upgrade of eight Main Street lights is the final phase of a project in Aurora, making all the street lights in town LED. The city is replacing 250 watt HPS lights with 135 watt LED, resulting in savings of approximately 7,637 kWH and $760 annually.

Lighting upgrades to save cities $20K

Since the start of 2017, eight Heartland customers have received funding for upgrading lighting to more efficient LEDs. Collectively, they’ve been awarded over $31,000 for the upgrade of 322 street lights and 24 T12 fixtures. A ninth energy efficiency grant was awarded to help finance an automated meter project.

The cities of Aurora, Arlington, Volga, Plankinton, Groton and Tyndall, SD and Madelia Municipal Light and Power in Minnesota each earned energy efficiency grants for street lighting upgrades. Collective annual savings for their projects are projected at just over $20,000 and 225,000 kilowatt hours.

The city of Madison, SD earned an energy efficiency grant to replace inefficient lighting at the city’s depot building, which houses both the Chamber of Commerce and Economic Development Corporation–a project that could earn them an annual savings of about $1,000 or 9,600 kilowatt hours.

The average payback period for all the lighting projects is about 4.5 years.

Colman, SD also received a $5,000 grant for upgrades to their automatic meter system. The city is purchasing a portable radio-based device to acquire data from utility meters. The new system will allow for more accurate and timely meter readings.

 

Aurora, SD flourishes as bedroom community

Public Power is Good for Business is a quarterly section highlighting successful businesses and projects located in our customer communities. Public power communities help foster prosperity and growth by offering reliable electric service at cost-based rates.

 

City is affordable alternative for young families and first-time homebuyers

Josh Spilde knows what it’s like to be a first-time homebuyer.

“Let’s say you spend around $150,000 on a home that is 40-50 years old,” he said. “That’s a big investment and it probably included a large down payment. But the house is old, so you might need to replace windows or fix the roof within a few years or even months.”

Spilde, an electrical contractor, knows many first-time homeowners can’t pay for these early repairs because their money is tied up in buying the house.

“I think housing should be affordable,” he said. “And it should be maintenance-free living for a while.”

This belief led Spilde to purchase and develop fourteen acres in Aurora, SD. What was once raw farm land is now a 24-lot housing development complete with water, sewer, electrical and roads.

“My goal is to provide affordable housing, targeting low- or middle-income families and first-time homebuyers,” Spilde said.

As for his choice in location?

“Aurora was a natural fit,” he said.

Location, location, location

Aurora is home to three housing developments, two of which are entering their second phase.

Home to roughly 532 people, Aurora has seen a housing boom in the last few years. A number of factors have played into this recent growth, but its proximity to another rapidly-expanding community has had the most impact.

Only a few miles away is South Dakota’s fourth-largest city, Brookings, which has seen a 25% population growth since 2000. In the last ten years, it has added over 1,700 housing units, but struggles to keep up.

“Their job market is exploding, but they are running out of affordable places to live,” said Aurora Utility Manager John Muller. “Also, they are developing away from the business district, in the opposite direction from Aurora. That has worked to our advantage.”

Much of the growth in Brookings has been in the southwest corner of the city. Aurora sits about three miles east of Brookings, just south of US Highway 14.

“The commute to Brookings is around five minutes and it’s mostly highway,” said Muller. “You might travel more miles [than you would if living in the city], but you’ll get where you need to be in half the time. Less traffic, fewer stoplights.”

Also in Aurora, the price is right.

“There is a big demand for housing in Brookings, but it’s hard to find good homes under $200,000,” said Spilde. “That’s not a realistic price range for a large portion of people.”

Strike while the iron is hot

Spilde is the owner and operator of Spilde Electric in Arlington, SD, a business he’s run since 2003. In 2015, he was looking for land to build and sell a spec house when he discovered the property in Aurora.

“I realized it wouldn’t cost much more to buy the fourteen acres than to develop one or two lots in Brookings,” he said.

Utilizing low-interest financing from the Heartland Economic development Loan Program (HELP) Fund and First Bank & Trust, he purchased the land and installed the infrastructure.

Spilde’s development in Aurora currently has three homes, including a vacant spec house, pictured in the foreground, for sale for $177,000.

“I sent out bids for water, sewer and road but did all the electrical work myself,” he said.

At $27,900 each, lots are going fast.

“We sold two lots by the end of 2016, and both of those already have houses on them,” he said.

Ten more lots sold within the first two months of 2017, plus two foundations have been poured.

“Half of phase one has sold, and we’ve already started working on phase two, which will be another 18 lots. Phase three is in the works for the next year or two,” he said.

Spilde’s development also offers 1,900 square-foot spec homes that come with a price tag of around $177,000. They can be purchased as-is or custom built with varied floor plans and features.

“I have alternate floor plans for small, medium or large split-foyer or ranch style homes,” he said.

Acting as the general contractor, he plans to keep building spec homes until the development is full.

Ready, set, grow

Spilde’s development is the latest of three to sprout up in Aurora.

“Since 2008, we’ve added 130 new homes. That’s almost double the number of structures in less than ten years,” said Muller.

Although it’s been mostly young families moving in, the city hasn’t doubled in population.

“We’re doing a wastewater study right now, and they are projecting us to reach about 760 people at the next Census,” Muller said. “With the growth we’re seeing from the housing developments right now, our lagoon will be at capacity. If they continue to expand, our lagoon will need to as well.”

Luckily, Muller said, wastewater is the only utility service feeling the strain of growth. The city installed a new substation in 2015 with an upgraded capacity.

The Aurora Quick Stop opened downtown in 2016, a sign of the flourishing community.

“It was sized appropriately, so electrical is not an issue and neither is water,” he said.

He will continue to monitor the situation, though, as the boom in housing has trickled down to other aspects of life in Aurora.

Already home to an ethanol plant, Aurora will welcome a new oil extraction plant northwest of town in a few months.

Also in 2016, a new gas station and body shop opened on Main Street that also includes two second-floor apartments. Employing about ten people and offering fuel, light grocery and auto mechanic work, it has been a welcomed presence in a community that prides itself on convenience.

“After the old station closed in 2008, people used to blame that for the poor housing market,” Muller said. “Now we’ve got this great Quick Stop plus affordable properties and family-friendly neighborhoods–I can’t wait to see what will happen next.”

The future starts today

In 2015, the city of Brookings established a task force to evaluate their local housing situation and the needs of low- and middle-income residents. Patty Bacon, chair of the Brookings Affordable Housing Tax Force, recently gave a public presentation to share some of the groups’ findings and make recommendations.

According to Bacon, some experts say rent or mortgage should be 20-25% of a person’s net income. In Brookings, that should come to about $823 a month on average.

But, Bacon says the average mortgage in Brookings exceeds $1,200 a month, and about half of all renters in the city spend 30% or more of their household income on rent.

While Brookings officials try to find solutions for affordable housing within their city limits, Spilde, Muller and others think living in Aurora is a viable option.

“People like small-town living,” said Muller. “As long as Brookings keeps growing the way it is, I don’t see us stopping.”

Aurora’s new substation nears completion

Progress continues on a new substation in Aurora, SD. Built next to an adjacent Western Area Power Administration substation, the new substation will provide a new delivery point for the city’s WAPA and Heartland power.

According to project officials, the structure is complete and has been tied in to the substation. The majority of the WAPA substation work is finished and the switchgear has been installed. Next, the crew plans to install the connections and install and energize the underground wires from the substation to the city.

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