Finance committee recommends pay-as-you-go TIF for JT Klein project; Ellers flagged a $3.3M gap

City attorney Rick and staff briefed the Finance Committee on June 23 on a long-running TIF negotiation with developer JT Klein. The agreement under consideration is a pay‑as‑you‑go TIF that ties payments to the actual property taxes generated by the project and includes a post‑closing review to confirm the project's financing gap.

Rick said the consultant Ellers concluded there is a financing gap of about $3.3 million; the TIF would reimburse the developer up to 95% of the property taxes generated after an occupancy permit, but only if the project is built and produces increment. "They would only get the amount if they actually build the project and it generates enough increment to actually make the payments," Rick said, adding that a post‑closing look‑back will reduce payments if the developer secures additional funding.

Staff noted the developer lost about a year of increment because of delays securing tax credits; those lost years were the developer's risk and do not change the currently negotiated terms. Committee members sought clarification on terms and whether the pay‑as‑you‑go format limited city exposure; staff and counsel said the structure substantially limits city risk because payments require both construction and sufficient tax increment.

Lisa moved and Azie seconded a motion to recommend the agreement to council; the committee voted in favor and will forward the finalized TIF agreement and supporting materials to council for final approval. The item includes a consultant review at financial closing and incremental reimbursements contingent on actual assessed values and tax payments.