New home construction under way at Cyber Estates

THREE PRICE-POINT HOMES, what would have been called "affordable housing" in the past, are under construction in the Cyber Estates development. Twin homes and three-bedroom homes are also under construction.

The information has been available on the Lake Area Improvement Corporation's website for years, since the housing study was completed in 2016.

Household growth in Madison and Lake County creates a demand for new housing construction. Losses due to deterioration, demolition or natural disasters result in the need for replacement housing. Unmet existing needs generate a demand for "age-appropriate housing."

Despite the need, the housing study reported little new home construction in Madison. However, since the report was issued, developers have stepped up to do what they could. Among them was Dean Gulbranson, who developed a section of land in the northeast part of Madison.

More recently, Kelly Nielsen of Nielsen Construction of Harrisburg has been developing the Cyber Estates east of Division Avenue and north of N.E. 9th Street, installing the infrastructure in 2020 and beginning new home construction in partnership with Shawn Callies of Callies Homes in Howard.

"He's targeting the entry-level homes and I'm targeting the higher-end homes," Callies said. However, Callies is the general contractor for all of the homes.

Currently, five single-family homes and two twin homes are shaping up for completion in coming months. One of the homes has already been sold with construction ahead of schedule, according to Callies.

The Cyber Estates were introduced to the public in 2019 when the land was platted and project supporters approached the Lake County Commission with the request that a tax increment financing (TIF) district be created. According to a flyer distributed at the time, the TIF district included 33 lots, including 10 for twin homes.

The TIF, which was approved for a portion of the Cyber Estates, was requested to help keep housing costs down. A TIF does this by reducing the developer's investment in the project by paying for infrastructure improvements with the increase in tax revenue.

Surrounding the TIF district, other lots were planned as part of the Cyber Estates development. Higher-end homes will be constructed on those lots.

On the east side of Cyber Court, one of the new streets in the development, two three-bedroom homes are near completion. Each of these is about 1,450 square feet and will be in the $340,000 price range.

According to the Nielsen Construction website, the ranch-style homes feature a covered deck, oversized garage, painted millwork, painted cabinets and a tiled master shower. These were the first to be started and are near completion, according to Callies.

"The first two houses are Sheetrocked and ready for painting and trim," he said.

Across the street, three two-bedroom homes are under construction. Each of these is about 1,050 square feet and, depending upon the features and layout, will be in the $239,000 to $249,000 price range. They have an open floor plan, vaulted ceilings and unfinished basements. Each also has a three-stall garage.

Slab construction was used for the twin homes near completion. Each two-bedroom unit has between 1,300 and 1,400 square feet and will be in the $250,000 price range. The Nielsen Construction website indicates the features may vary from unit to unit.

For these, the plumbing, wiring and HVAC systems have been installed. The next step for each is to hang the Sheetrock, according to Callies.

In addition to working on these projects, Callies has purchased a lot to build a spec house that will be in the $500,000 to $600,000 price range. These are the types of homes he builds in Sioux Falls, and he expects it to showcase some attractive features.

"They're looking for a lot of amenities," he said of the type of buyer who seeks a higher-end home.

Although some of the materials for the new homes are being purchased locally, Callies said he was forced to hire subcontractors from Sioux Falls to do work he had hoped to subcontract locally. This was due to pricing considerations, not due to the quality of work that could be expected from local contractors.

"Kelly set a price point for entry-level homes, so we had to be cautious," he explained.

Because the larger companies in Sioux Falls can purchase materials in "such massive quantities," they were able to offer a bid that came in between $3,000 and $5,000 lower than Madison-area contractors. However, floor coverings are being purchased from Montgomery's Furniture, paint is being purchased from Kolorworks Paint and Decorating, and cabinets are being purchased from Rosebud Wood Products.

Callies, who has worked with Nielsen in the past, praised him for his work in Madison.

"Kelly has done an outstanding thing for the town. He went out on a limb," Callies said, reiterating a message that many in Madison already know. "The town needs the housing."

Callies said that those interested in seeing the work being done in the new development are welcome to stop by and look at the new homes and to talk with those working on them.