DATE: February 26, 2019
TO: Members of the Housing & Redevelopment Authority
FROM: Janine Atchison, Housing Coordinator
Title
Resolution in Support of Tax Increment Financing for 28-Unit Townhome Development.
Body
SUMMARY AND ACTION REQUESTED:
The Housing & Redevelopment Authority (HRA) to consider adoption of HRA Resolution 2019-04 in support of tax increment financing (TIF) for a 28-unit townhome development in Northfield by Schrom Construction, Inc.
BACKGROUND:
Troy Schrom of Schrom Construction, Inc. would like to build a 28-unit rental townhome project in Northfield. Schrom has completed similar projects including:
* Eden Valley Place-Owatonna, MN (47 Units)
* Autumn Wind Townhomes-Eagle Lake, MN (90 units)
* Humboldt Townhomes-Humboldt, IA (12 units)
* Wedgewood Cove-Albert Lea, MN (30 units)
* Hawthorn Park-Spirit Lake, IA (30 units)
* Greyson Place-Belle Plaine, MN (12 units)
* Brecken's Place-Marshalltown, IA (48 units)
* Greystone Place-Dodge Center, MN (12 Units)
At the December 18, 2018, HRA meeting Mr. Schrom spoke of preliminary plans to build 28 workforce two and three bedroom rental townhomes in Northfield. The Northfield property would have on-site management provided by Lloyd Management. Lloyd Management currently manages Spring Creek Townhomes in the Southbridge area of Northfield.
To close a gap in the financing required for the project, Schrom will be seeking tax increment financing (TIF) through the City of Northfield. Schrom has expressed willingness to accept the statutory requirements of TIF financing which include making 20% of the units (6-units) available to renters at 50% of the area median income (AMI). The Northfield City Council has the authority to receive, approve or disapprove TIF application. However, Mr. Schrom is asking the HRA to support TIF for the project.
ANALYSIS:
According to a Maxfield Research market study completed in January 2018, for the City of Faribault, Northfield has a rental vacancy ra...
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