(KNZA)--Hiawatha residents are raising concerns about a proposed housing development planned west of Bruning Park.

A large crowd filled Monday night’s City Commission meeting, with many questioning the project—particularly its potential impact on local taxes.

The commission had previously approved a development agreement with developer Michael Webb on March ninth, passing in a narrow three-to-two vote.

This week, Commissioner Laura Tollefson said she would not have supported the agreement if she had known the grant deadline came after the contract was signed. She believed the city was facing an urgent timeline.

City Attorney Andy Delaney warned that reversing the decision could expose the city to legal risks.

Under the agreement, the City of Hiawatha would cover public infrastructure costs estimated at nearly 866 thousand dollars. City Administrator Brad Scott says city crews are expected to install water and sewer lines, while street construction would be handled by a contractor.

During public comment, several residents argued the money would be better spent on affordable housing—such as developing vacant lots or assisting local landlords—rather than partnering with an out-of-town developer.  Several noted that the city had not supported their past housing projects.

Commissioners agreed to hold a town hall meeting on the project.

In the meantime, the project will continue moving forward through the zoning and platting process.