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Council tables development agreement with Denison Housing Development LLC amid TIF and pricing disputes
Summary
City Administrator presented a revised development agreement for Denison Housing Development LLC; council debated TIF payment timing, whether TIF-funded units can be rented, and minimum resale pricing, and ultimately moved to table the agreement for further attorney review and clarification.
City Administrator told the council that bond counsel recommended restarting the existing contract with a fresh amendment that would credit the developer for two already‑constructed units and clarify the use of previously bonded tax increment financing (TIF) funds.
The City Administrator said bond counsel found the prior developer had not provided documentation in a timely way and recommended a new agreement that contemplates six to seven proposed units with credit for two already completed. “Bond counsel’s recommendation was that we start fresh with a new amendment, but give them credit for the areas that have already been constructed,” the City Administrator said.
Council members pressed for specifics on how and when TIF dollars should be paid and whether the city should restrict TIF‑funded units from being rented. One council member argued against setting a minimum resale price, saying the market should determine prices and that the city’s return would come through tax dollars over time. “I don’t think a minimum price makes sense. The market should be the market,” a council member said.
The debate included alternative proposals: require full TIF payment only after a unit sells; split payments (partial payment at occupancy and remainder on sale); or require deed restrictions to prevent use as rentals for a set time. Staff also raised the possibility of reversion of TIF funds if units are not sold within a specified timeframe.
After extended discussion about breach remedies, bond timing and whether to extend the development agreement deadline into 2025 or 2026, a council member moved to table the item so counsel could finalize recommended language. The motion to table carried; council asked staff to return the item after final attorney review and after the administrator and bond counsel reconcile the payment and occupancy provisions.
Next steps: staff will seek clarifications from bond counsel and the city attorney, revise the draft agreement according to council direction, and return the item at a future meeting or a special meeting if timing requires it.
