Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Penner South Rhid topic
No spam. Unsubscribe anytime.
Andover council establishes RHID for Penner South to unlock 284 homes; agreement prioritizes city debt service
Summary
The council adopted an ordinance and development agreement for the Penner South Reinvestment Housing Incentive District (RHID), approving a $2.88 million RHID participation to offset infrastructure costs that developers say would enable 284 entry-level homes; council voted unanimously to approve the ordinance and the development agreement.
The Andover City Council on June 30 adopted an ordinance establishing a Reinvestment Housing Incentive District (RHID) for the 73-acre Penner South property and approved a development agreement with Meadow Pass LLC that sets how incremental property taxes will reimburse infrastructure costs.
Assistant City Administrator Jolene Graham told the council the RHID is designed to offset extraordinary water, sewer and electrical costs that have stalled development on the site. The city's feasibility analysis estimates $2.88 million in RHID participation to help fund mains and electric work; the analysis projects the RHID could be retired in about eight years under a conservative buildout (155 units) and as fast as five years under the developer's assumed pace to complete 284 homes.
Developer representatives from Shelonberg Development said the project includes market-rate entry-level homes in the $250,000'20,000 range and that the company's vertically integrated model and partner homebuilder Liberty Homes enable faster, higher-quality delivery. The developers said roads and utilities are already being platted and that streets could be in within roughly 10 months if approvals proceed.
Under the development agreement the city will install water and sewer mains and the developer will manage electrical installation; both the city and developer may seek reimbursements. The agreement requires the developer to submit certificates of project costs with invoices and conditions reimbursements on final acceptance by the city engineer. The city will retain a 5% monthly administrative fee from RHID revenues. The agreement prioritizes disbursements: (1) city administrative fee, (2) bond debt service for infrastructure, then (3) developer reimbursements.
Graham emphasized the RHID is not an increase in taxes for current residents: taxes still will be collected on new homes, but for a period those incremental taxes are diverted to a fund to retire the infrastructure debt rather than flowing directly to jurisdictions that typically receive them. Staff also noted the RHID statute allows up to 25 years for participation but said current analysis shows a much shorter retirement horizon in this case.
Council members praised staff's work on the financing and engineering, and the ordinance and development agreement passed on unanimous voice votes. Jolene Graham noted that because the RHID affects other taxing jurisdictions the county and school district had an opportunity to object by July 30; staff said those jurisdictions received presentations in May and raised no objections at that time.
The development agreement records estimated figures: an $86 million total estimated construction cost for the project and $2.88 million in RHID participation; the city attorney's feasibility memo listed an estimated full-build valuation of roughly $70 million in added taxable value when all units are completed. The council approved the RHID ordinance and the Meadow Pass LLC development agreement 5-0.
Next steps include ministerial steps to record the RHID, proceed with plats and permitting, and execute the engineering and construction work; staff said reimbursements to developers will follow the formal request and acceptance process outlined in the agreement.
