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Committee approves $7.8M TIF for 156‑lot Annan Housing development, with 84 units designated affordable
Summary
The Legal and Finance Committee voted to create Tax Increment Financing District 92 to support infrastructure for a 156‑lot residential development, including extension of Reservoir Road; the TIF request totals roughly $7.8 million with city‑administered fees and a projected 15‑year payoff period.
The Legal and Finance Committee voted Sept. 11 to create Tax Increment Financing District 92 to help fund infrastructure for the Annan Housing Development, a planned 156‑lot residential subdivision north of the current terminus of Reservoir Road.
Community Development Director Vicki Fisher and TIF planner Mike Dugan told the committee the project requests roughly $7.8 million in eligible TIF project costs to cover capital improvements, professional fees and contingencies tied to Reservoir Road extension and on‑site infrastructure. Dugan said the total project cost is just over $11 million and projected increased valuation from completed construction would be about $63.8 million.
Dugan described the development as phased construction beginning in 2028 (approximately 49 homes in phase 1) and completing the 156 homes by 2030. Of the lots, staff described 84 as smaller‑scale homes to be priced at $190,000 and below, and 72 as single‑family homes priced at or below the first‑time homebuyer purchase price for South Dakota (stated in the presentation as $385,000; that threshold changes annually).
Fisher said the TIF proceeds would also allow the city to extend Reservoir Road to the future East Anamosa Street and to grade a portion of East Anamosa that will open the property to development. "This is a $7,800,000 TIF request to bring forward a residential development of 156 lots," Fisher said.
Committee members asked about a white, undeveloped area inside the city limits visible on the project map; Fisher said the area contains a mobile‑home park and other undeveloped parcels and that prior annexation efforts created an enclave that has complicated maintenance responsibilities between city and county. Council member Bill Evans expressed concern that repeated use of TIF funds for suburban projects can encourage low‑density sprawl rather than infill development, but the committee approved the TIF by motion.
Staff estimated the TIF would be repaid in about 15 years, below the 20‑year maximum often used for such financing. The project includes a small city administration fee to be carried forward to future projects and amendments. With committee recommendation, the measure will move to the full council for final action as required by city procedures.
