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Sterling Commission weighs housing incentive districts as developers express interest
Summary
Commissioners heard an extended briefing on Reinvestment Housing Incentive Districts (RHIDs), including statutory prerequisites, two developers’ preliminary interest (K2M and Hood Construction), financing models (pay-as-you-go vs. debt issuance), and a directive to seek feedback from Rice County and USD 376.
City Manager Ian Hutcheson and Andrew Kovar, partner at Spencer Fane LLP (teleconferenced), briefed the Commission on the Reinvestment Housing Incentive District (RHID) program as authorized under state statutes. Hutcheson noted the City's June 2023 housing needs analysis qualifies for RHID consideration and described the two basic financing models: pay-as-you-go (developer fronts improvements and is reimbursed from RHID revenues) and debt issuance (local government issues bonds serviced by RHID revenues). Hutcheson said both Spencer Fane and financial advisor Piper Sandler advise pairing an RHID with a special assessment district to improve creditworthiness for investors.
Two developers have expressed interest: K2M Investments (developer of the Peace Estates Addition) plans to pursue a pay-as-you-go approach to help build a permanent road on Kruse Way, while Hood Construction has indicated likely interest in a debt issuance model for the Nottingham Addition east of 908 N. Broadway Avenue. Hutcheson emphasized that overlapping taxing jurisdictions (Rice County and USD 376) effectively can veto an RHID by a vote of their governing bodies, and that a Redevelopment Plan and Secretary of Commerce approval are required before a district is established. The Commission directed staff to seek formal feedback from Rice County and the USD 376 Board of Education before proceeding.
