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Council establishes TIF District 116 and approves development agreement for 65-unit workforce housing
Summary
The council adopted a modification to the Development District and established Tax Increment Financing District No. 116 to support a 65-unit apartment project by Edge Housing LLC; the TIF term is up to nine years and estimated to generate roughly $962,500 in net tax increment.
The Thief River Falls City Council approved the establishment of Tax Increment Financing (TIF) District No. 116, dubbed the EDGE workforce housing TIF district, and separately approved a development agreement with Edge Housing LLC to support a proposed 65-unit apartment complex.
City staff reported the proposed development would occupy about 5.07 acres the developer is acquiring from Sanford Health Network North. The council heard that Maxfield Research documented a vacancy rate under 3% for more than two years, and staff said current market conditions make construction unlikely without financial assistance.
The TIF plan presented to the council showed an anticipated completed market value of about $7,000,000 and an estimated net tax increment of approximately $962,500 over a maximum nine-year term. Staff said the city will reimburse the developer on a pay-as-you-go basis from captured tax increment after issuance of a certificate of completion and under terms of a limited-revenue TIF note.
A public hearing on the matter had been held earlier. The council voted to adopt the TIF modification and plan and then voted to approve the development agreement authorizing the city administrator and mayor to execute the documents and related development documents.
Council members and staff framed the action as meeting the statutory "but-for" test for TIF — i.e., stating that, given current construction costs and market conditions, the developer would not undertake the project without city assistance — and emphasized the project’s goal of adding workforce housing and expanding the tax base.
Motions to adopt the TIF plan and to approve the development agreement passed on voice votes.
