Mitchell commission approves boundary and project plan for TIF District 46 to support 38-unit affordable housing project

The Mitchell City Commission voted on Tuesday to establish the boundary and approve the project plan for Tax Increment Financing (TIF) District 46, a proposal tied to a 38-unit affordable housing development by Legacy Point LLC.

City staff presented the plan, saying the project would include one-, two- and three-bedroom apartments, an indoor parking garage and outdoor parking, and amenities such as a fitness center, lounge, conference rooms and secured mailboxes. Staff reported the city’s total taxable value at about $1,750,000,000 and said the proposed district’s base value is well under the 10% statutory cap (roughly 2.5% by staff’s estimate).

The project’s eligible TIF cost was listed as $1,394,413, with discretionary grants of $1,144,413 and administrative costs of $250,000. Staff said the total TIF amount would not exceed the figure shown in the developer agreement, that no interest is projected, and that the TIF term would not exceed 20 years. Staff also said the land’s current taxable value is about $31,750 and estimated the full improvement value at roughly $3.8 million, with projected tax increment capture over 20 years of about $1,157,961.74. Staff estimated a project completion date on or before May 1, 2027.

During the hearing, a staff member clarified that the $250,000 administrative costs were intended to reimburse the city, not to be paid to the developer, and that the draft language was written as ’will be reimbursed’ intentionally. Staff also noted a procedural change replacing the finance officer with city staff for certification duties and added a provision to allow reimbursement of any future state-imposed administrative fee from the TIF rather than from the city general fund.

Two members of the public addressed the commission. Leah Fisher identified herself as "the director of vehicleization" and asked whether the discretionary grant was waived and whether the proposed TIF overlapped any other TIF; staff replied that discretionary amounts were waived for this application and there was no overlapping TIF. Steve Simpson raised fairness concerns, arguing the project competes with an HOA development that received public support and contending that amounts listed as discretionary should be classified as infrastructure to improve transparency. "Those amounts belong on line 1 as infrastructure cost," Simpson said, and he urged the commission to address what he described as an uneven playing field in TIF awards.

After public comment, the commission first voted to set the TIF boundary and then voted to recommend approval of the project plan as amended. Chair called for voice votes and both measures carried.

What happens next: the approval authorizes the city to proceed with the developer agreement and the TIF process per the terms presented; any final developer agreement and disbursements will be subject to the conditions the commission discussed and to applicable state law.