School board approves nine‑year TIF for Riverchase 2 housing project, 5–1
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Summary
The Faribault school board voted 5–1 to approve a resolution supporting a nine‑year tax increment financing plan for the 76‑unit Riverchase 2 market‑rate housing project; consultants said the TIF fills a financing gap and the city will consider a development agreement on March 24.
The Faribault Public Schools board voted 5–1 on Feb. 17 to approve a resolution supporting a nine‑year tax increment financing (TIF) plan for Riverchase 2, a proposed 76‑unit market‑rate apartment project at 105 Riverchase Court.
Shane Redlanger of Ehlers, the city’s consulting finance firm, told the board the project is “about $13,400,000” and that the TIF is needed to bridge a financing gap so the developer can proceed. Redlanger described a standard “but‑for” analysis used to show that the tax base would not materialize without TIF assistance and noted the plan is structured so the base taxes still flow to jurisdictions and the TIF would be a pay‑as‑you‑go obligation.
The developer, Ari Colas of Hamilton Real Estate, said the project will be two separate buildings under separate ownership and reiterated that the units are market‑rate, not low‑income. On rents he provided rough estimates, saying studios would be “about 2,100,” one‑bedrooms “1,200” and that two‑bedroom numbers vary. Redlanger also cited a Maxfield Research vacancy study showing rental vacancy below 3% in the study area for two years, which the city relied on to show local housing need.
Board members pressed on school district impacts and affordability. Redlanger and Superintendent Venti said the city currently owns the site and no tax base flows to the district now; Redlanger said the district would likely see only a very small net tax impact from the TIF while the district could gain enrollment and future tax base when the TIF expires. Board member Linda Moore voted no and asked how to explain the housing role to constituents; other members said statutory steps require school board action for this type of TIF.
Director Linda Boudreau, Candace Knudson, Jerry Robichaud, Chad Wolf and Chair John Bellingham voted in favor; Linda Moore voted no. Redlanger said the county already approved the TIF earlier the same day and that the city council will consider a development agreement March 24 if the approvals proceed. Construction is planned to begin this summer if the process continues.
The board’s resolution approves the TIF plan; the city will negotiate the development agreement and specific eligible project costs at the March council hearing.
