Litchfield City Council backs pay‑as‑you‑go TIF for Haven on Hubbard housing project; approves wage increase and other routine measures

The Litchfield City Council authorized pay‑as‑you‑go tax increment financing (TIF) support for the proposed Haven on Hubbard family housing project and approved several routine municipal items at its meeting.

Deanna, the project presenter, described Haven on Hubbard as a family rental development that would include seven one‑bedroom, 13 two‑bedroom, six three‑bedroom and four four‑bedroom units, covered first‑level parking with an elevator, interior and exterior community spaces, a playground, a community garden and in‑unit washers and dryers. She said six units will be reserved for people with disabilities and four for people experiencing homelessness; UCAP was named as the service provider and Meeker County committed housing support for those 10 units. "We are trying to max out our points," she said, describing a strategy to meet Minnesota Housing scoring criteria.

Deanna outlined financing that together totals roughly $13.7 million: a roughly $661,000 first mortgage (which includes the requested pay‑as‑you‑go TIF portion), about $9 million in tax‑credit and investor equity, a roughly $3.6 million Minnesota Housing deferred 0% loan, approximately $325,000 in sales‑tax and energy rebates, and a deferred developer fee. She told the council the project currently requests about 144 points under Minnesota Housing scoring rules and that applications are due July 9, with awards announced in December.

City staff described the council action as an early procedural step. Dave (city staff) summarized an Ehlers memo saying the project meets the "but‑for" test for TIF and that the council's support tonight positions the city to include TIF in the financing package; he emphasized additional public hearings and steps would follow if state funding is awarded.

The council moved and seconded a resolution to authorize use of pay‑as‑you‑go TIF and to waive certain city fees for the project; the resolution listed a pay‑as‑you‑go commitment of $84,567 in net present value spread across a 26‑year period plus estimated administrative costs and a separate $5,000 water‑meter hookup fee. Councilor Carlson moved the resolution and Councilor Larson seconded. The council completed a roll‑call vote and approved the resolution.

Other actions taken the same night included:

• A variance for a fence at 808 South Marshall Avenue: John reported the Planning Commission recommended approval of a variance to permit an 8‑foot fence where the residential zoning limit is 6 feet; the council approved the variance.

• A wage schedule change for part‑time liquor‑store employees: staff proposed raising the starting part‑time wage to $15 an hour, a 50‑cent increase for key holders and a $2 increase for one position with additional duties (to cover responsibilities previously done by a full‑time clerk). Councilor Larson moved the resolution, Mathwig seconded it, and the council approved the change. Staff said retroactive pay would be difficult to administer and will not be provided.

• A two‑year renewal of a civic arena lease with the Department of Public Safety for Community Room B (664 sq ft) at $600 per month for the term (Oct. 1, 2026–Sept. 30, 2028); Mathwig moved and Larson seconded the renewal, which the council approved.

• Direction to open a city parcel at 1002 South Armstrong Avenue for public bid after surveying: staff presented a $30,000 offer for the lot, discussed survey and turnaround needs for snow plowing and water/sewer access; the council instructed staff to survey and open the lot to public bid.

• Approval of financial reports: council discussed planned electrical upgrades at the Lark and temporary financing from the wastewater infrastructure fund pending state reimbursement; the council approved the financial reports.

Why this matters: Council support for the TIF resolves one of the financing elements the developer is counting on as it finalizes a Minnesota Housing application; the wage change affects municipal seasonal/part‑time employees and the land‑sale decision moves a city parcel into a formal public process instead of a private sale.

Votes at a glance: all items listed above were moved, seconded and approved by roll call during the meeting.

Next steps: the housing project team will complete its Minnesota Housing application (due July 9); state award decisions are expected in December. If Minnesota Housing funding is awarded, the city will proceed with the remaining TIF approval steps including public hearings and any required ordinance actions.