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City staff backs considering a TIF cap increase for the Lanes project to cover higher costs
Summary
City municipal advisor and staff told the council the Lanes development cost about 53% more than estimated in 2020 and the developer has requested roughly $1.1 million more in reimbursable TIF costs; staff recommended the council consider raising the pay-as-you-go cap and adjusting percentages but asked for more detailed year-by-year numbers before action.
City staff and the city's municipal advisor urged the council to consider an amendment to the Lanes project's TIF reimbursement cap after reviewing final costs and tax-increment projections. Bruce Kimmel, the city's municipal advisor, said the project’s final development cost was "almost 53% higher than what was originally estimated back in 2020," and that the developer has asked for an increase of about $1,100,000 to the original $5,900,000 cap.
Kimmel explained the original December 2020 pay-as-you-go agreement reimbursed up to $5,900,000 or for 20 years with declining five-year pay blocks, and that construction delays meant the TIF clock produced very little increment in the first three years. He recommended council consideration of reduced pay-go percentages in later blocks and noted that, because assessed values have risen, the project is likely to reach the originally anticipated cap several years earlier than 20 years.
Laura Smith, speaking for city staff, emphasized that the city's interest is to balance developer viability with retaining more incremental taxes for city-eligible capital projects. "We have both a significant amount of stormwater expenses, which would be eligible, and a significant amount of upcoming street improvements," she said, urging council members to weigh which TIF-eligible costs the city would prioritize.
Council members pressed for additional documentation and more granular, year-by-year pro forma tables showing how dollars would flow to the city and other taxing jurisdictions under the current and proposed caps. Staff agreed to prepare those details for the May committee meeting before any formal action. The chair noted there was consensus to bring an amendment forward as an action item at the May committee meeting for formal consideration.
