Council hears presentation on proposed Tax Increment District No. 17; action deferred

City officials and a municipal advisor reviewed a project plan for a proposed Tax Increment District No. 17 on Jan. 6, outlining a mixed‑use development that would include residential build‑out and roadway improvements; the Common Council agreed not to vote on the plan that night and asked staff to return with the item on Jan. 20 so procedural notices can be confirmed.

Phil Costin, a municipal advisor with Ehlers, told the Common Council the proposed district covers "104.77 acre site" and is structured as a mixed‑use TID that may remain open for up to 20 years or until project obligations are repaid. He described estimated project costs of about $17,800,000 and a potential value increase of roughly $69,100,000, and said the plan assumes substantial residential development and roadway work on South 18th Avenue.

Why it matters: If created, the TID would be used to finance infrastructure and negotiated development incentives that aim to spur housing and commercial development in an area the city previously designated for industrial use. The plan includes large items — notably South 18th Avenue roadway and water main improvements — that would be financed over time from incremental property tax revenue generated inside the district.

Costin said the plan identifies statutory tests the city must meet for a mixed‑use district, including limits that no more than 35% of the district acreage be newly platted residential and a minimum density of three units per acre for newly platted portions. He said the proposed plan is “just under that 35%” threshold and uses conservative development assumptions (for example, an expected 95‑unit subdivision at about $425,000 per unit yielding roughly $40 million in new value for that portion).

The project plan also lists municipal revenue obligations (MROs) that would be paid from increment if generated, including a $1,211,000 pay‑as‑you‑go obligation to Continental Properties and a still‑negotiating item for up to $5,000,000 for Newman Development to help fund internal subdivision roads. Costin said those are structured so the city would not have to borrow the money up front; incentives would be paid only as increment is produced.

Costin identified a $6.6 million estimate for South 18th Avenue roadway and water main work; unlike the MROs, the city would likely need to borrow to complete that project and would look at TID cash flows before issuing debt. He also noted that four parcels that currently sit in an older TID (No. 4) are proposed to be included in the new boundary; overlaying those parcels would freeze value for TID No. 4 and attribute new growth to the proposed TID No. 17.

Council members asked procedural and policy questions. One council member said the presentation materials were not posted in the meeting packet and expressed concern that other members might be seeing the plan for the first time; the council discussed whether the required class‑1 notice for the Joint Review Board could still be met. City staff said they would confirm the timing and could reschedule the Joint Review Board meeting if necessary.

One council member asked about open space and parks within the proposed residential areas; Costin said park and subdivision design items would be addressed during the normal subdivision review process rather than within the TID project plan, which focuses on financing.

No formal action was taken. The council chair recommended placing the TID item on the Jan. 20 council agenda so members have time to review the presentation packet and to ensure statutory notice requirements are met before the Joint Review Board final action scheduled for Jan. 21.

Provenance: Project plan presentation and discussion appear in the meeting transcript beginning with Phil Costin’s remarks introducing the project plan and ending with the council’s decision to defer action.

The council will revisit the item on Jan. 20 for possible action and the plan returns to the Joint Review Board for final consideration on Jan. 21.