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Council agrees to forward TIF transfer request for three apartment buildings to Monday council meeting
Summary
Herzog Property Management requested the city allow transfer of three housing TIF notes to a new owner as part of a purchase; the committee voted to move the request to the full council after discussion about affordability protections for 21 units tied to the TIF.
The Committee of the Whole voted to move a developer’s request to transfer existing housing tax increment financing (TIF) notes for three apartment buildings to the full council for consideration on Monday.
What was requested: Sam Herzog of Herzog Property Management asked the council to permit transfer of existing TIF notes that remain on three buildings originally developed under a prior TIF agreement. Herzog said the original developer fulfilled the stated obligations to construct the housing and that the purchaser (Herzog’s group) would continue to meet the affordability commitments: 20 percent of units (21 units) restricted at 50 percent of area median income (AMI) as required by the housing TIF agreement. Herzog said his company plans building improvements (radon mitigation, parking repairs, sidewalk/settling fixes) and expected to continue certifications documenting tenant incomes each year.
Discussion and concerns: Council members and others raised questions about the effect of a TIF transfer on affordability requirements if ownership later changed hands, how the TIF revenue compares with the annual value of the rent discounts, and whether the TIF could be extended beyond its current term. Herzog explained the developer’s expectation that the TIF enabled the original project to be built and that any purchaser buying with the TIF would generally be expected to maintain the original affordability commitments; he also said extensions are sometimes sought by communities to preserve affordability. Council member Jim and others weighed the city’s fiscal position against the neighborhood housing impact; council members sought clarity about the TIF amount remaining (quoted in discussion as roughly $560,000 present value across taxing jurisdictions) and annual tax increments. Herzog said the TIF provides the subsidy that enables the discount to tenants; he said his firm typically provides a larger monthly discount than the current manager and that he expected local management and maintenance jobs to continue.
Action: After questions and debate, the committee voted to move the developer’s request to the Monday council agenda for final action. The vote at the Committee of the Whole was to forward the transfer request to the council meeting.
