Free residential lots in Claremont, Minnesota!

Sound like a scam? Officials in this southeast town of 548 people think that may explain why the offer has no takers. Not now. Not for years.

“I think it was just one of those things that people thought was too good to be true.” said City Clerk Liz Sorg.

But it is true, they want you to know. A developer bought the land for a subdivision but stopped after building one house when the housing market crashed in 2006. That left the town with $450,000 in bond payments and 14 empty lots.

At first Claremont tried to sell the lots, worth $28,637 apiece. No one came calling, so the town made the lots free. It placed ads in newspapers. It erected signs.

“We’re trying to advertise them a bit more and get the word out that it is a for-real deal,” Sorg said. “It is a free lot we’re willing to give you.”

Claremont spans just one square mile off Highway 14, with three parks, a bank and an ethanol plant. Officials are trying to sell its appeal as idyllic small-town living between Owatonna and Rochester.

Like many outstate towns, Claremont has struggled to hold onto its residents and attract new ones.

“We’d like to … get some extra children or families in town, or even an elderly crowd — just get some new people in town and fill up the development that’s just been kind of sitting here and nothing’s happening with it,” Sorg said.

Households making an income of $74,200 would qualify for the deal and pay $1,000 in administrative and closing costs for the lots. Sorg estimates that participants could build a single-family home on the lot for between $130,000 and $150,000.

It’s not the first time that a small Minnesota town has gotten creative to bring in new people. Other communities have used the lure of free land and cash incentives — the town of Harmony, for instance, is offering people up to $12,000 to move there.

New Richland, which Claremont credits as an inspiration, advertises on its website, “Free land!! That’s right!” Participants can claim lots that are 86 by 133 feet on a new addition in the northwest part of town and seek tax increment financing to reduce the cost of developing the lot to about $14,000.

New Richland leaders, who did not return messages, came up with the land giveaway a decade ago in hopes of drawing up to 60 more residents to the southern Minnesota community of 1,200.

“You just wonder how long you can hang afloat,” Joyce Hanson told the Star Tribune in 2004, explaining that she hadn’t filled her restaurant there in months. “The whole Main Street is hurting.”

Many small communities on the Great Plains have started such mini-homesteading programs to stem the loss of their tax base, businesses and families, according to the Center for Rural Affairs.

Since Claremont’s program was featured in a local news report, a trickle of calls have come in, though no deals have been signed. Ginny Busch, Claremont’s former mayor, said that even people who qualify for the program may not know how to go about getting a loan to build, “so I think it’s going to be a lot of hand-holding for people if they are interested.”

There’s also the added pressure of needing people to move into the lots to generate revenues for the bonds on the failed development.

“We’ve tried about everything possible to try to get somebody to build on these lots,” said Busch. “We have to keep paying — the bonds don’t go away.”

“The road is in,” said Busch. “It’s all paved. There’s water. There’s sewer. There is electrical. There’s curbs.”

But, she lamented: “No houses.”