City Council Meeting Date: July 21, 2026
To: Mayor and Members of Council
From: Scott Wopata, Community Development Director
Emery John, Program Associate
Title
Consideration of a Resolution Approving Tax Increment Financing (TIF) Assistance Agreement for Harvest Hills Second Addition.
Body
Action Requested:
Consideration of a Resolution Approving Tax Increment Financing (TIF) Assistance Agreement for Harvest Hills Second Addition.
Summary Report:
Harvest Hills Townhomes, LLC has applied for a final plat to create Phase One of Harvest Hills Second Addition, on a parcel situated on the south side of Northfield and west of Northfield Middle School. The parcel is 10.30 acres and proposes creating 15 lots with 38 units and 3 outlots which will be part of the planned second phase. This first phase consists of 22 duplex units, 6 tri-plex units, 4 four-plex units and 6 six-plex units.
The final plat and development agreement have been presented in separate resolutions. The developer is requesting Tax Increment Financing (TIF) from the City of Northfield to make this project financially feasible. Without TIF, the project is not feasible.
80% of the units (30 units) are market rate and estimated to rent for approximately $2,400/month; affordable for households around 80% of the area median income (AMI) or $93k annual household income for a family of 5.
20% of the units (8 units) will adhere to the TIF statute of affordability and are estimated to rent for approximately $1,700/month; affordable for households at 50% of the Area Median Income as defined by the Department of Housing and Urban Development for Rice County. This would be considered affordable for a household with annual income of approximately $60k for a family of 5.
The development includes pedestrian and biking infrastructure improvements. This will provide improved access and connectivity to the Middle School and trail systems directly adjacent.
The total amount of TIF assistance provided for this project is $1,915,000 over 20 years. The full amount of incremental (increased) tax available for all phases of Harvest Hills is forecasted to be $10,507,797 over 26 years. This was determined in the TIF Plan reviewed and approved by Council on May 19, 2026. The actual amount of TIF assistance provided was calculated for the specific costs in Phase 1 and sized based on the minimal amount needed to make the project financially feasible while incorporating affordability and sustainability requirements. Phase 1 will construct 38 out of 71 units, or 54%. The associated Phase 1 TIF amount is only $1,915,000 out of $10,507,797, or 19%.
The structure of the TIF note is “pay-as-you-go", with the developer covering all upfront costs. There is one true-up clause to ensure any reduction or savings in total development costs are shared between the City and the developer if over $100,000.
Recommendation:
Staff recommend approval of the resolution
City Plans & Policies Relevance:
The Council reviewed multiple policies related to this development when approving and adopting the TIF Plan associated with this development on May 19, 2026:
• Business Subsidy Policy (9.03)
• Tax Increment Policy (9.01)
These two policies overwhelmingly support a TIF Agreement for Harvest Hills. While there are many alignments between the project and these policies, most notable is the focus on affordable and workforce housing. Additionally, the project is implementing sustainability measures in compliance with the Sustainable Building Policy (8.06).
This development meets the Northfield 2045 plan in many ways including, but not limited to:
The planned development is in a mixed-use residential zone on the Future Land Use map Figure 4 (56)
The TIF plan triggers the City’s Sustainable Building Policy, which aligns to Chapter 3: Access: Strategy 6: Design for resiliency and sustainability; Action 2: “Encourage the use of energy-efficient mechanical systems and building products and/or the use of building designs and materials that reduce lifecycle carbon and reliance on non-local energy sources in rehabilitation and new construction to decrease building operation costs and impacts on the environment” (77)
The added bike access to the middle school and school buildings aligns with Chapter 3: Access: Strategy 5: Design for safe access, by connecting school district trails to neighborhood streets.
Chapter 4: Sustainable Economic Future Strategy 8: Build more housing (104), and Strategy 10: “Create programs to support affordable and sustainable homes and neighborhoods. (106).
Additionally, this project is aligned with the adopted Strategic Plan of the City of Northfield Strategy #2: Increase Housing Availability, target to add 50 multi-family homes annually through 12/2028.
This proposed development also exceeds the goals of the strategic plan by ensuring the affordability of 20% of the proposed units.
Alternative Options:
Council may choose not to execute the TIF Assistance Agreement.
Financial Impacts:
• Council approved a TIF Plan on May 19, 2026 establishing the maximum increment amount of $10,507,797 over the maximum 26 years for all phases of Harvest Hills.
• The attached TIF Agreement commits $1,915,000 over 20 years to Phase 1.
• TIF Funding Structure: “Pay-as-you-go.” The Developer will incur all upfront costs and be reimbursed over time. This ameliorates any risk being taken on by the City.
Tentative Timelines:
• April 16 - Planning Commission motion and review
• April 21 - Housing Redevelopment Authority motion and review
• May 5 - City Council action on Harvest Hills preliminary plat
• May 19 - City Council public hearing on establishment of TIF district; consideration of resolution adopting TIF plans and approving TIF district
• July 21 - City Council considers the TIF Financial Agreement, Development Agreement, and Final plat
• August/September 2026 - Construction of Phase 1 begins