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Council approves pledge agreement allowing Stadheim lender to collect TIF payments
Summary
The council approved a pledge agreement that permits Stadheim Properties' lender to collect tax increment financing (TIF) receipts tied to the Stadheim apartment project—up to $250,000 over 20 years; first-year apartment taxes estimated at about $35,000.
Clerk/Treasurer Steve Engel explained a pledge agreement with Stadheim Properties of Owatonna that routes the project's tax increment financing (TIF) proceeds to the project's lender as collateral for financing. Engel described the arrangement as returning a portion of apartment property tax revenues to Stadheim Properties' lender over a 20-year term, with a maximum return of $250,000 recorded in the minutes. Engel said the city still pays general obligation bond payments from property-tax receipts first.
Engel said the estimated first-year apartment property taxes after completion are about $35,000 based on the Steele County assessor's last estimate, and that the agreement affects only the Stadheim apartment property taxes, not other city taxes. Mayor Groth moved to approve the pledge agreement; the motion was advanced by Council Member Joel Meyer and passed by roll call with ayes recorded.
