Developer seeks 12-year pay-as-you-go housing TIF for 39-unit Fourth Lane Flats

Kasson City Economic Development Authority members heard a presentation from developer Jamie Judish of 504 Developments LLC about a proposed 39‑unit apartment building the team is calling Fourth Lane Flats and asked staff to review updated financials before the board takes a funding recommendation.

Judish said the project would sit on Fifth Street near the Sixteenth interchange and, as currently designed, would have 39 units over underground parking, with approximately one parking stall per unit. He said the developer is requesting a pay‑as‑you‑go housing tax increment financing package and told the EDA, "we are requesting the 4060% TIF," and that the group is asking for a 12‑year term: "We would ask for 12 because…that gets us through the uncertainty of the first…"

Why it matters: the developer said the TIF is the final funding piece to make the project viable. The proposal includes an affordability commitment tied to housing TIF rules: Judish stated that "40% of our units need to be reserved for 60% AMI or below," and the developer said the team is prepared to work with city staff on reporting and compliance. Judish also said the pro forma shows the project’s early-year debt service coverage ratio is tight — "it's shy" by a few percentage points — and that the updated pro forma was resubmitted for review.

Key project details and developer comments: Judish described the current design as 39 units with underground parking (roughly one stall per unit), surface parking adjacent to existing townhomes on the site, and noted the site currently contains an existing single‑family home that the team has not yet decided how to handle. He said the building is being designed so an additional roughly 24 units could be added if market conditions support it, but that expansion is not being pushed now.

Judish listed several local investors and partners involved in the deal, saying the financing mix includes local equity and that the team intends to seek conventional bank financing. He said the developer is aiming for conventional financing in place by May 1 and estimated construction would take about 11 months once started, with a lease‑up window the developer estimated could be between several months to about a year.

Affordability and reporting: Judish said the housing TIF requires an income set‑aside and acknowledged the need to work with staff on tracking and annual reporting. On rent targets he said he hoped two‑bedroom units could rent at about $2,100 per month but that the pro forma was built to support a lower target (roughly $1,800 per month for a two‑bedroom) to ensure cash flow under conservative assumptions.

Next steps and staff direction: City staff and the board asked for the updated pro forma and assessor information. Mike Bubini was identified as the staff reviewer who will examine the pro forma in detail; Judish said he had reworked the pro forma and would send the updated version to staff. City staff (Ian) told Judish they would circulate the materials to the board and that the EDA expects a recommendation at the next meeting after staff and the reviewer complete their checks.

No formal EDA action was taken at this meeting; the matter was left with staff for review and to return with a recommendation.

Ending: Board members asked the developer to provide detailed pro forma materials and AMI calculations (Judish said the HUD AMI tables for Olmsted/Dodge combined counties were used in the current pro forma). Staff told the developer to send the updated pro forma and supporting documents to Ian, and the EDA plans to revisit the TIF request at its next meeting.