After her husband's longtime flooring business dried up three years ago, Patty Hilburn took a look around her Baldwin Township neighborhood and came up with a plan to fit the times. She started her own company fixing and maintaining foreclosed homes in Baldwin and beyond. "We do plumbing repairs and mowing," she says. "We clean. We do everything."
The business has done well enough that Hilburn, who moved from Wayzata a decade ago, has been able to hire some of her neighbors and family--former painters and sheet--rockers. "The trades are washed up," she says. "Every day more and more people are losing their jobs." For Hilburn, it's "nice in a weird, sad way" to be able provide this particular type of work. "Everybody is hungry and wants to pay their bills," she says.
Baldwin's building boom, which began in the mid--1990s and included more than 100 subdivisions, came to an abrupt end around 2006. At the peak in 2001, developers built 168 houses. Last year there were only six. That changed life for Hilburn, just as it altered the equation for many Baldwin residents who'd come to view the township as a place of change and expansion.
The township not only stopped growing, it began to contract. As the state unemployment rate topped 7 percent, residents fell behind on their mortgages. There have been more than 200 foreclosures in Baldwin during the past three years, according to data from the Sherburne County sheriff's office. And, according to the Standard & Poor's/Case--Shiller index, home prices across Sherburne County have fallen 40 percent since 2005.
"Prices are down," says Zimmerman Realtor and Baldwin resident Jeff Dotseth, whose staff has shrunk from 18 to four. "The majority of sales now are short sales or foreclosures."
In almost every development, you can find one or two empty houses, windows bare, no footprints in the snow. Baldwin has hardly become a ghost town, nor have foreclosures eroded the tax base, according to town board chair Jeff Holm. "The banks that own the foreclosed home must pay the property taxes," he says. "The delinquent taxes so far have not gotten out of hand. Baldwin Township is fiscally sound."
Yet this is a brand new set of circumstances for a township whose most fervent recent debates have centered on how best to manage growth, especially the rush of new homes and roadways. The foundering economy has added twists to longstanding issues such as whether Baldwin should become its own city, complete with a city council and ownership of planning decisions. Or whether it should negotiate a voluntary, wholesale annexation with neighboring Princeton, where Baldwin's residents shop and attend church and school. Nowadays, some residents think it's best to wait and watch.
In 2009, Sherburne County had the second highest residential foreclosure rate in Minnesota, behind only Isanti County, according to the Minnesota Home Ownership Center, a St. Paul nonprofit that tracks housing trends. And both Princeton and Zimmerman were among a dozen outstate communities chosen last year to receive money from the federal Neighborhood Stabilization Program, which targets areas with the highest foreclosure rates and percentages of sub prime mortgages.
"Zimmerman has one of the highest rates of foreclosure in greater Minnesota," says Bill Reinke, executive director of the Central Minnesota Housing Partnership, who works to find buyers for foreclosed properties. "In a lot of the small towns we are working in, the population doubled in the last five or 10 years. There are a lot of subdivisions." These new "collar communities" of the metro area, he says, "have been hit particularly hard by foreclosures."
That's raised the question: Does the downturn spell the end of growth in the township, or is it merely a hitch in a longterm arc of expansion? Both the state and Sherburne County think it's possible that Baldwin's population could double by 2030, to as many as 14,000 people. The pressures that drove growth still exist, explains Sherburne County planner Jon Sevald. "People are still going to want to move out where land is more affordable and where they can get away from other people."
But planning consultant Charles Marohn, whose Community Growth Institute works with cities and townships across Minnesota, calls that thinking "crazy." He says, "If you talk to the Realtors and developers and standard bureaucratic planning organizations, they'll say we're in a lull. After the lull, we will be magically transformed into 1995. We'll see roads with cul--de--sacs and tract housing going up. That's insane. It ignores what has caused this downturn. It ignores the financial situation the country is in. This isn't a correction so much as a transformation. The old model of development doesn't pay for itself. It's financially ruinous."
Most people think there will be some growth in the future, but it may not come right away and it may resemble pre--boom times, when between 25 and 50 houses were built per year. "We have 160 lots in developments that haven't been built on," says Holm. He explains that after "all the short sales and foreclosures are gone and people are interested in new construction," developers will want to build out those lots, in order to earn back their investments. "Five years from now, we could have another increase in population," he says.
The break in the action has, at least for now, taken pressure off issues surrounding planning, annexation and incorporation. Princeton development director Jay Blake says, "With the economy the way it is now, I don't see a significant amount of annexation occurring in the near future." Petitions for annexations are down statewide, according to Christine Scotillo, executive director for the state's office of Municipal Boundary Adjustments.
And incorporation looms as too expensive and unwieldy at present, posits Marohn. "Right now at the Legislature, there is the discussion, 'Do we have too many governments?' Everyone is screaming for more efficiency in government. If Baldwin tries to become its own city, the taxpayers should rebel."
Holm counts the pause--if it is merely a pause--as breathing room, a chance to do some deep thinking about the future. But he's not breathing easy. He's got his eye on Princeton's comprehensive plan, which calls for eventually annexing half of Baldwin, including its business district, a significant source of tax revenue. "Staying a township for as long as possible would be the cheapest and most efficient form of government," says Holm. And yet, if the town does nothing, "What is going to happen is the city will slowly chew us up and we won't have negotiated how we're going to work things out."
Next week: How to build better developments in Baldwin