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Commissioners discuss RHID financing for a proposed housing project; key questions remain
Summary
Commissioners received an explanation of how a Reinvestment Housing Improvement District (RHID) bond would work and raised questions about project valuation, length of revenue diversion and who bears default risk; no binding decision was made and the item will return for further consideration.
At a regular meeting, commissioners discussed a proposed Reinvestment Housing Improvement District (RHID) structure for a residential project and asked detailed questions about tax impacts and project valuation.
Commissioner (speaker 2) explained the basic structure to colleagues: "The RHID bond would be taken out. The city would take a bond approximately 20 to 25 years long... That project is worth approximately $3,000,000 because they're saying there's 10 units of $300,000." He said that if the RHID is adopted the taxes that would normally flow to local governments (city, county, school districts and other taxing entities) would instead be redirected to repay the bond, meaning the county would forgo its portion of property tax revenue for the bond term.
Commissioners pressed for more specifics. Questions focused on how many years the county would be giving up revenue, how valuation was determined, whether the school district would agree to participate and what protections exist if a private developer structured as an LLC files for bankruptcy. Commissioner (speaker 2) and the Chair (speaker 1) agreed those were open questions the city and developers need to clarify.
Staff noted a convening meeting was scheduled that evening; commissioners said the RHID proposal would still need to come back to the commission for a final decision on whether Brown County would participate. The commission did not take binding action during the meeting.
Next steps recorded in the meeting: commissioners expect additional documentation on project valuation, the length of any tax diversion, and written proposals clarifying who is financially responsible in case of default. The commission will consider the RHID participation decision in a future public meeting.
