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Council declines to amend Sugar Creek Commons TIF to cover market-rate apartments
Summary
City staff told the Common Council that Forward Development Group’s proposed change of a planned hotel to multifamily apartments does not meet the existing TIF agreement conditions; council members indicated they would not support amending the TIF agreement to provide assistance for market-rate apartments.
Council members on Monday told Forward Development Group (FDG) that the city will not amend the 2021 Sugar Creek Commons Tax Increment Finance (TIF) agreement to convert the hotel portion of the approved development into market-rate apartments eligible for the previously agreed TIF payments.
City staff explained the 2021 development agreement tied TIF payments (up to $3,200,000 in the TIF agreement) to a defined hotel project with a conference facility; staff emphasized that FDG missed contractual dates for public improvements and site remediation required under the TIF agreement. Staff advised the council that the proposed multifamily replacement does not satisfy the agreement’s hotel requirement and that Verona historically has not provided TIF payments for market-rate apartment projects (the city has used TIF for affordable housing projects previously).
Council members uniformly expressed reluctance to amend the agreement. Several alderpersons noted the developer assumed project risk when the agreement was signed; others said the city should not repurpose public TIF resources to support market-rate housing that replaces naturally occurring affordable units. The mayor and municipal counsel explained that if the council wanted to pursue an amendment, detailed terms would require closed-session negotiation, but the discussion ended with council direction not to amend the TIF agreement.
Staff said the developer may proceed with private development proposals that do not rely on TIF assistance, but any request for TIF would require a formal amendment process and council approval. The council’s position preserves the original terms of the TIF agreement and highlights the city’s precedent of using TIF for affordable housing rather than market-rate apartment financing.
