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Committee approves 10-year tax exemption for Linnan Lofts redevelopment at 2020 Sixth Avenue North
Summary
The EDIC approved a 10-year property tax exemption tied to a Renaissance Zone incentive for Linnan Lofts LLC to redevelop two blighted buildings at 2020 Sixth Avenue North into a 22-unit apartment building; city staff and a PFM analyst presented financial analysis, and the committee approved the exemption by voice vote.
The Economic Development Incentives Committee voted to approve a property tax exemption covering years 6–10 for a redevelopment at 2020 Sixth Avenue North, a proposal from Linnan Lofts LLC to replace two blighted buildings with a 22-unit apartment building.
City economic development staff presented the application, saying the site contains a boarded single-family building and a six-unit apartment that suffered an upper-floor fire about four years ago and has been vacant. The developer is also pursuing a five‑year Renaissance Zone exemption that would run immediately; the committee-approved action would add a second five‑year exemption covering years 6 through 10 after the Renaissance Zone period ends.
Jim Gilmore, city staff, said the TIF request totals about $487,000 over a 10‑year period; he reported the present value (capped at a 10‑year term) is approximately $347,000. Matt Schnacklinburg of PFM, the city’s fiscal reviewer, said his independent pro forma estimated an internal rate of return (IRR) of about 6.5% without public help and roughly 11% with assistance; debt service coverage rose to a roughly 1.2x level with assistance, meeting a typical lender threshold.
Developer Andrew Hanson, identifying himself as managing member of Linnan Lofts LLC, said the project would place 22 units—primarily one‑bedroom units—on the small footprint with 21 enclosed parking spaces and that the developer intends to retain the property long term. Hanson said demolition and construction costs remain estimates and that the developer had the site under contract, with closing contingent on approvals.
Committee members questioned assumptions that materially affect project feasibility. One committee member asked about the annual appreciation rate used in underwriting; PFM said the city’s standard internal assumption is 2% for comparability across projects, though PFM staff said higher local historic appreciation (averaging about 5% in some neighborhoods over the prior decade) would boost returns substantially. Committee members also raised neighborhood safety and demolition timing; Gilmore said demolition could be made a condition in the development agreement (for example, contingent on starting construction this year) and discussed coordinating with inspections on dangerous‑building enforcement where appropriate.
Gilmore summarized anticipated tax receipts: current combined property tax on the parcel is roughly $2,200–$2,300 annually; Gilmore estimated the redeveloped property could be worth about $2 million in assessed value such that after the exemption period the project would contribute materially higher taxes to local governments.
The committee approved the exemption by voice vote following a motion and second; no roll-call tally was recorded on the transcript.
The developer and PFM remained available to the committee for follow-up documentation and additional underwriting questions; staff said the city would document eligible costs and confirm demolition and utility work before finalizing incentive payments.
