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Victoria council approves 15-year TIF to support 162-unit Victoria South housing project
Summary
The Victoria City Council approved establishing Tax Increment Financing District 1-10 to support a 162-unit apartment project that includes 33 affordable units targeted to households at 50% of area median income; the council also approved related loan and development contract actions.
Victoria City Council on Tuesday approved a 15-year tax increment financing (TIF) district to support a planned 162-unit apartment project in the Victoria Ridge area, voting to modify the city’s development program, authorize a short-term intrafund loan for administrative costs and approve a private development agreement with the project developer.
Community and Economic Development Director Jen Brewington introduced the item and turned the presentation over to Tammy Yamal of Northland Public Finance, who described the requested TIF district (District 1-10) as a financing tool meant to capture incremental property-tax revenue to make the project feasible. “This will not be for the statutory maximum 26 years,” Yamal said. “It will be limited to a duration no greater than 15 years.”
Yamal told council the proposed building would contain 129 market-rate units and 33 affordable units (about 20% of the total) income-qualified at 50% of area median income (AMI) for the duration of the district, noting that the TIF structure constrains income qualification but does not itself impose rent caps. She said the plan assumes average annual tax-increment revenue of about $380,000, and that the developer would receive 90% of the increment to reimburse up to approximately $3.5 million in verified project costs, payable with interest under the development agreement.
Council member Peterson asked whether assignment of TIF benefits could be blocked if the developer later sold the property; Yamal said development agreements typically require any assignment of the TIF note or agreement to be presented to the city for its consent, so the council would have the opportunity to review an assignment. When a councilor asked whether the program guarantees lower monthly rents for income-qualified tenants, Yamal reiterated that the TIF’s contractual requirement is income qualification, not a rent cap, and noted the developer has proposed rents at affordable levels as part of their pro forma.
No members of the public spoke during the continued public hearing. The council adopted the resolution modifying the development program and TIF plan, approved an intrafund loan resolution to advance limited administrative costs, and approved the private-development contract between the City of Victoria and Victoria South Apartments LLC by voice vote. The motions carried without recorded roll-call tallies.
Next steps outlined by staff include final execution of the development agreement and verification of eligible project costs before TIF reimbursements are paid.
