7/25/2019 3:44:00 PM Rosehill Senior housing project OK'd for TIF to cover $2.23 million gap
In their second meeting of the week for Lindstrom City Council members (see story about the work session on facilities) a Tax Increment Financing agreement and plan for Rosehill Properties LLC was adopted 4-1 at the regular city council session July 18. Council member David Waldoch voted no without comment.
The project receiving the development expense relief is a senior residential rental complex being built on South Lindstrom Lake, on the site of the old Rose Hill Resort. It will be 87 units, and include levels of senior care and 17 affordable units. Lindstrom City Council approved the development itself months ago.
Council was told by Ehlers Analyst Keith Dahl the developer had first sought $3.5 million in TIF, but after Ehlers’ financial review and applying TIF statutes to the request it was Ehlers’ advice the TIF should not exceed $2.23 million.
The tax “increment” is the difference between what a property generates originally in property taxes and what it will generate after being improved, so the base property tax is still put in the government’s bank account at the original level. The project gets a sum of this to use to pay off project costs and make the development feasible. Lindstrom gets $22,000 annually out of the Rosehill increment to administer this plan.
Rosehill is a $22 million project to construct and the county assessor calculates it at $13.5 million valuation for taxing purposes. It will get 17 years to collect this increment and apply it to recoup certain redevelopment costs. Dahl said this is an estimate and the property may not need 17 years, because as the property gains in value the increment increases.
As long as the COC annual return is under 12 percent, a project may be considered for TIF in Minnesota. Council was advised Rosehill should hit 11 percent Cash-on-Cash annual return in year 19.