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Council approves TIF for 70‑unit Woods apartments; debate centers on Matty Street inclusion and state classification
Summary
City Council approved Tax Increment Financing District 41 to support a proposed 70‑unit apartment complex, but public commenters and councilors questioned inclusion of Matty Street in the TIF boundary and whether the South Dakota Department of Revenue will classify the district as affordable‑housing or a local TIF.
The Mitchell City Council voted to create Tax Increment Financing District 41 to support a proposed 70‑unit apartment development by Paul Groeneweg, LLC. The project plan presented to the council shows developer‑certified eligible costs of $2,281,000 and projects incremental valuation sufficient to finance the request and leave a portion of increment potentially available to fund future Matty Street improvements.
Staff explained that adding Matty Street to the legal description gives the city flexibility: the increment from the apartment project would be generated early and the council then has up to five years to decide whether to use remaining increment for Matty Street or let the developer’s increment be paid out earlier. Staff noted the plan is written so that if the state does not classify the district as affordable housing, the TIF would terminate (per the project plan language), which staff said reduces risk to the city.
Don Peterson, attorney for the developer, described project features including three‑bedroom units intended to serve families, an on‑site fitness room and possible pool and play areas. Public commenter Steve Simpson supported the affordable‑housing TIF for the developer but objected to including Matty Street south of Quiet Lane inside the same TIF boundary. Simpson argued the Department of Revenue’s classification process could treat the combined project as a local TIF (triggering school‑levy adjustments) and urged the council to send the plan back to planning commission to remove Matty Street.
Council members and staff discussed process issues: staff said the state no longer issues preliminary classifications and that the city’s project plan contains a termination clause if the state does not classify the district as affordable housing. Councilors asked questions about prior TIFs and oversight; staff described increased reporting and certification procedures now required. The council approved the TIF after discussion; staff said they will provide the required documentation to the state following approval.
