City Council Meeting Date: November 12, 2024
To: Mayor and City Council
City Administrator
From: Nate Carlson. Economic Development Coordinator
Title
Decertification of Hiley Neff Housing Development TIF District
Body
Action Requested:
The Northfield City Council shall make a motion to approve resolution decertifying the Hiley Neff Housing Development Tax Increment Financing District.
Summary Report:
The City of Northfield approved the use of Tax Increment Financing on April 9, 2002 (Resolution #2002-123) for the Hiley-Neff Second Addition housing project, which has a term of 25 years. The project included a redevelopment of the former Senior Center site and construction of eight single family affordable homes.
The pay-as-you-go TIF note requires the developer to pay all development costs with their own funds. As the net tax capacity within the taxing district increases, the increase in property taxes paid by the developer (tax increment) can be used to reimburse the developer for eligible costs such as land acquisition, site preparation, and public infrastructure.
This TIF Note obligation will be satisfied at the end of this year, approximately three years early, and the Council can take action to decertify the district. The project met its goals of redeveloping a site for new affordable housing. Additionally, the project exceeded estimates by ending the district early and thus the property taxes generated going forward benefitting the tax base of the City, County and School District.
Alternative Options:
No alternative option at this time.
Financial Impacts:
The proposed Tax Increment had a projected net present value of $113,387 in 2002. All incentives paid to the developer will be from the property taxes paid by the developer (tax increment) and there is no direct financial impact to the City of Northfield.
Tentative Timelines:
Council resolution to decertify the district - November 12, 2024
Decertification submitted to Rice County - By end of 2024